The New Zealand dollar plunged on Thursday following the Reserve Bank of New Zealand surprised the markets by reducing the cash rate for the first time in over four years.
RBNZ Governor Graeme Wheeler announced the central bank cut the rate from 3.5% to 3.25%.
The kiwi traded at 70.60 US cents from 72 US cents earlier. Against the Australian dollar, the currency was at NZ$1.10 from NZ$1.08.
The currency was also affected by a series of roadblocks recently, with unemployment rate increasing and national income hit by disappointing dairy prices.
Additional rate cuts to our year-end projection of 3% “could come as soon as next month,” said Paul Dales, Chief Australia and New Zealand Economist at Capital Economics.
The material has been provided by InstaForex Company – www.instaforex.com