The New Zealand dollar extended its decline against its trans-Tasman counterpart after figures showed Australian unemployment unexpectedly fell last month.
The kiwi fell as low as 92.11 Australian cents overnight, trading at 92.25 cents at 8am in Wellington from 92.61 cents yesterday. The local currency declined to 86.84 US cents from 87.17 cents yesterday.
Australia's unemployment rate fell 0.2 percentage points to 5.8 percent in March, with 18,100 new jobs in the month, according to the Bureau of Statistics. Economists were expecting the jobless rate to increase to 6.1 percent. The report spurred demand for the Australian dollar as traders pared their expectations the Reserve Bank of Australia will have to cut rates again.
"Any further rate cuts by the RBA had already been priced out of the market and yesterday's release cemented that position," Kymberly Martin, strategist at Bank of New Zealand, said in a note.
Stocks fell on Wall Street as investors continued to spurn biotech and internet companies in the lead-up to corporate earnings season, underpinning demand for an auction of US$13 billion of US government Treasuries. Still, the risk aversion among traders didn't spill over into the greenback, with the US Dollar Index, a measure of the US currency, falling to a one month low.
