KEY POINTS:
The New Zealand dollar dipped only slightly today on the news of the Reserve Bank of Australia (RBA)'s 100 basis points cash rate cut.
The RBA cut the cash rate to 4.24 per cent, its lowest level in six and a half years.
It was the fourth month in a row the RBA has cut interest rates in a bid to head off the impact of slower world economic growth on an already soft Australian economy.
The New Zealand dollar dropped from a high of A83.17c to a low of A82.68c immediately after the announcement.
ANZ head of foreign exchange trading Tony Allen said the market was probably looking for more of a cut given US Federal Reserve chairman Ben Bernanke's comments and equities meltdown.
However, Mr Allen said 100 basis points would support the Australian dollar, which in turn would support the New Zealand dollar.
"The aussie cross had broken the psychological $1.20 overall kiwi is very much on the back foot."
Meanwhile, the New Zealand dollar was worth 0.4192 euro, down from 0.4234 this morning, and down to 35.53 British pence from 35.99p this morning.
It was worth US52.90 cents at 5pm, down from US53.62 at 8am today.
Mr Allen said US55 cents was as much as could be expected over the next week, and all eyes would now be on the Reserve Bank of New Zealand's official cash rate decision on Thursday.
Meanwhile, the US dollar rebounded against the yen on Tuesday after touching a five-week low, getting a boost from buying by Japanese investors.
The yen slipped against the dollar and euro even though the Nikkei share average fell 4.6 per cent as Asian shares followed US shares down.
The dollar rose 0.4 per cent from late US trading on Monday to 93.65 yen.
The euro rose 0.7 per cent to 118.36 yen. Against the dollar, the single European currency rose 0.3 per cent to $1.2642.
The Bank of England, the European Central Bank as well as the Reserve Bank of New Zealand will hold monetary policy meetings later this week.
Currency rates:
NZ dlr/US dlr US52.90c US54.18c
NZ dlr/Aust dlr
A82.75c A83.64c
NZ dlr/euro 0.4192 0.4278
NZ dlr/yen 49.48 51.62
NZ dlr/stg 35.53p 35.36p
NZ TWI 53.96 55.12
Aust dlr/US dlr US63.86c US64.78c
Euro/US dlr 1.2620 1.2666
US dlr/yen 93.48 95.27
- NZPA
