PERTH: The Australian dollar has fallen back below 70 US cents in response to New Zealand’s third interest rate cut since June.
The Reserve Bank of New Zealand announced the move this morning, taking the country’s official rate to 2.75 per cent.
“At this stage, some further easing in the official cash rate seems likely,” the central bank’s governor Graeme Wheeler said in a statement on the decision.
The local currency fell from an overnight high of nearly 70.7 US cents back to 69.8 US cents on the news, signalling currency traders believe the move also makes further rate cuts in Australia more likely.
It was a mixed night for global markets, as Wall Street retreated but European stocks continued their recent run of gains.
Markets initially rose in New York but the mood turned on investor fears that a hike in US interest rates could be just a week away.
The Dow Jones Industrial Average closed down 239 points or nearly 1.5 per cent at 16,254, while the broader S&P 500 fell 1.4 per cent (27 points) to 1,942.
The catalyst was data indicating the number of available jobs in the US surged to a record high in July.
The US Labor Department figures showed 430,000 job opening were added in the month, pushing the rate of opening to 3.9 per cent.
It is another sign of an increasingly healthy US economy, stoking investor fears that the Federal Reserve’s meeting next week could result in an interest rate rise for the first time in nearly a decade.
