The New Zealand dollar was weaker after the Reserve Bank announced plans to effectively print about $30 billion over the next 12 months and after Prime Minister Jacinda Ardern said the nation will move to full lockdown by Wednesday in the hopes of stopping the spread of covid-19.
The kiwi was trading at 56.38 US cents at 5pm in Wellington compared with 57 cents in New York on Friday while the trade-weighted index was at 66.02 points from 66.90.
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The Reserve Bank announced a bigger than expected bond buying programme this morning to help keep financial markets liquid and prevent financial conditions from tightening. That was followed by the government's staggered lockdown and a near-doubling in the wage subsidy to $9.3 an estimated billion.
Mike Shirley, a dealer at Kiwibank, said the spread between buy and sell prices at the close in New York had been "massive" at about 2 US cents.
"We did open slightly lower and then the Reserve Bank actions this morning sent the kiwi sharply lower to about 56 US cents," before recovering, Shirley said.
"On the Prime Minister's announcement, it fell below 56 again but then recovered. There's a lot going on, a lot of drivers," he said.
The currency's low for the day was at 55.96 US cents.
Shirley said currency markets are difficult to trade at the moment. "There are no interest rate differentials anymore, the data is irrelevant by the time it gets to you. All the central banks are doing their own things, trying to keep everything going," he said.
"The old rule books, the old playbooks, they're out the window in a scary new world."
And it's really a matter of watching the headlines and trying to interpret them.
"You have to weigh up, is this a good thing or a bad thing from an economic point of view."
New Zealand recorded 36 new cases of infection with the coronavirus today, taking the total to 102, though nobody has died here yet.
However, the authorities now believe we are getting community transmission, as opposed to only international travellers being infected, hence the Prime Minister's decision to take drastic action.
"Right now, we have a window of opportunity to break the chain of community transmission – to contain the virus – to stop it multiplying and to protect New Zealanders from the worst," Ardern told the nation.
The lockdown is expected to last at least four weeks.
Worldwide, the number of cases has reached 337,570 with 14,655 deaths, up from 245,660 cases and 10,050 deaths on Friday
The New Zealand dollar was trading at 97.71 Australian cents from 98.04 at 5pm on Friday, at 48.36 British pence from 49.48, at 52.60 euro cents from 53.58, at 62.15 yen from 63.99 and at 4.0013 Chinese yuan from 4.0752.
The bid price on the two-year swap rate fell to 0.5275 per cent from 0.6450 on Friday while 10-year swaps sank to 0.9825 per cent from 1.3500 per cent.