The New Zealand dollar was largely unchanged after the Reserve Bank of Australia cut the target cash rate a quarter-point to 0.75 percent as expected.
The kiwi traded at 92.78 Australian cents at 5.50pm from 92.75 cents at 8am and 92.71 cents yesterday. It fell to 62.43 US cents from 62.62 cents at 8am.
Globally low interest rates have added pressure on New Zealand's central bank to follow suit, and the RBA's decision to cut the cash rate, while expected, will make it more difficult for the RBNZ to stay put. RBA governor Philip Lowe said the reduction was to "support employment and income growth and to provide greater confidence that inflation will be consistent with the medium-term target" and took the global environment into account. He said low rates will stay in place for an extended period, and that the board is ready to cut further.
"It was fairly well priced already, ending with the Aussie very slightly lower and the kiwi holding up," said Imre Speizer, head of NZ strategy at Westpac Banking Corp.
He said the lower rate was well signalled and shouldn't force the RBNZ to immediately follow suit.
