"I would describe it as a bit of exhaustion after the last couple of days," says Peter Hunt, head of financial markets at Kiwibank.
The RBNZ cut its OCR from 1.5 per cent to 1 per cent and then the central banks of India and Thailand followed suit. Ripples of fear spread around the world, affecting both equities markets and other commodities-related currencies such as the Australian and Canadian dollars.
The slowing New Zealand economy and escalating global trade tensions, particularly between the United States and China, were major reasons for the RBNZ cutting the OCR so much – the market had been expecting a 25 basis-point cut.
China has just reported better-than-expected trade data showing its US dollar-denominated exports rose 3.3 per cent in July while imports fell 5.6 per cent in the month, taking its overall trade surplus to US$45.06 billion ($69.7b).
China's trade surplus with the US was US$27.97b in July, lower than the previous month's US$29.92b, the data showed
Earlier today, China's central bank, the People's Bank of China, set the midpoint of the trading range for the yuan above 7 to the US dollar, a signal that it might continue to weaken its currency in the face of US President Donald Trump's tariffs on Chinese imports into the US.
That suggests a further reaction from Trump whose administration named China a currency manipulator early this week.
The New Zealand dollar was trading at 95.29 Australian cents from 95.40, at 53.08 British pence from 53.15, unchanged at 57.58 euro cents, at 68.51 yen from 68.53 and at 4.5461 yuan from 4.5560.
The New Zealand two-year swap rate fell to another record low bid price of 0.9622 per cent from 0.9850 yesterday. The 10-year swap rate also plumbed new record lows at 1.2850 per cent from 1.3380.
