The New Zealand dollar fell against the greenback but gained against the Aussie after a hugely volatile day of being tossed about by unprecedented local and offshore central bank moves aimed at warding off the worst economic impacts of the coronavirus crisis.
The domestic currency traded a 2.2 US cent range after the local Reserve Bank slashed its official cash rate by 75 basis points, and then the US Federal Reserve slashed its key rate by a full per cent to zero.
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The kiwi was trading at 60.50 US cents at 5pm in Wellington after sinking as low as 59.33 cents and rising as high as 61.53 cents. It closed last week at 60.57 cents in New York on Friday.
It was trading at 98.15 Australian cents at 5pm in Wellington compared with 97.41 cents at the same time Friday. The trade-weighted index was at 68.65 points from 69.11.
The kiwi ended lower against the greenback, even though New Zealand interest rates area now higher than those in the US. The domestic currency also gained against the Australian dollar, despite local rates now being lower than Australian rates.
The Reserve Bank of Australia's cash rate currently stands at 0.5 per cent compared with New Zealand's OCR at 0.25 per cent.
Usually, currencies of countries with higher interest rates tend to rise against those of countries with lower rates. The greenback often becomes the beneficiary of a flight to safety in turbulent times, reflecting its reserve status as the currency of the world's largest economy.
Hamish Pepper, fixed-income and currency strategist at Harbour Asset Management, said the market is looking ahead to a just-scheduled RBA meeting on Thursday – normally the RBA reviews monetary policy on the first Tuesday of each month.
"The overwhelming story is that the RBA will not just deliver a rate cut on Thursday but they will announce a bond-buying programme as well," Pepper said.
Such bond buying is known as quantitative easing - printing money - and that is something RBNZ has ruled out in New Zealand, at least for now.
Pepper said the RBNZ may look at QE when it delivers its next monetary statement scheduled for May 13. "That's probably far enough ahead for the market not to worry about it straight away," he said.
Reflecting that belief, NZ government bonds maturing in April 2029 were trading today at 0.98 per cent while the Australian benchmark 10-year government bond was yielding 0.78 per cent.
Governments around the world are starting to close down all but essential economic activity as they combat the spread of the covid-19 virus. Today, New Zealand's government, which has already ordered that all travellers must self-quarantine themselves for 14 days after arrival, recommended there be no gatherings of more than 500 people.
New Zealand currently has just eight confirmed cases of people infected with the virus, all travellers, and none have died.
The coronavirus death toll reached 6,518 people globally today, up from just less than 5,000 on Friday. The number infected rose to 169,610 from just below 135,000.
The New Zealand dollar was trading at 49.02 British pence at 5pm from 48.79 on Friday. it was at 54.40 euro cents from 54.64, at 64.68 yen from 64.29 and at 4.2359 Chinese yuan from 4.2924.
The bid price on the two-year swap rate fell to 0.6125 per cent from 0.7730 on Friday while the 10-year swaps fell to 0.9430 per cent from 1.1480 per cent.