NEW YORK: The NZ land dollar touched a four-year low against the US dollar and gained against the Australian dollar after the RBA cut its key interest rate to a record low 2.25 percent, citing tame inflation and weak domestic demand.
The kiwi dollar may extend its own decline on speculation the impact of dry weather on agricultural output and weak inflation will give the Reserve Bank of New Zealand room to cut interest rates.
Imre Speizer, strategist at Westpac Banking Corp, said drought typically has a lagged effect, reducing feed over winter and prompting farmers to cull stock, which could contribute to weaker economic growth.
The Reserve Bank of Australia cut its cash rate to a record low, saying weak domestic demand and tame inflation in the face of falling crude oil prices will keep output growth below trend for longer.
The Australian dollar fell to its lowest in almost six years and took the New Zealand dollar with it.
The Australian dollar tumbled to 76.51 US cents from 78.05 cents immediately before the statement. The kiwi dollar dropped to 72 US cents from 72.98 cents and climbed to 93.96 Australian cents from 93.46 cents.
