The Kiwi dollar hit four-year lows against its U.S. peer on Tuesday, as a reaction to news of a surprise
rate cut by the Reserve Bank of Australia and as market players eyed New
Zealand employment data due later in the day.
NZD/USD hit 0.7191 during early European trade, the pair's lowest since March 2011; the pair subsequently consolidated at 0.7190, tumbling 1.57%. The cable was likely to find support at 0.7113 and resistance at 0.7330, Monday's high.
The New Zealand dollar was impacted by news the RBA unexpectedly lowered
its benchmark interest rate to a new record-low 2.25% from 2.50% at the
conclusion of its monthly policy meeting, says Investing.com.
Meanwhile, sentiment on the greenback remained vulnerable after data on Monday showed that U.S. consumer spending fell at the fastest rate since September 2009 in December, dropping 0.3% as households saved on cheaper gasoline prices.
Other reports indicated U.S. construction spending rose less than expected in December, while manufacturing growth slowed.
The kiwi was higher against the Australian dollar, with AUD/NZD declining 0.60% to 1.0617.
Also Tuesday, the Australian Bureau of Statistics said that Australia's trade deficit narrowed to A$0.44 billion in December from A$1.02 billion in November, whose figure was revised from a previously estimated deficit of A$0.92 billion. Economists had expected the trade deficit to A$0.77 billion in December.
In a separate report, the Australian Bureau of Statistics said that building approvals dropped 3.3% in December, compared to expectations for a 5.0% decline. The change in building approvals for November was revised to a 7.7% increase from a previously estimated 7.5% gain.
Later in the day, investors await the U.S. to release data on factory orders, while New Zealand is expected to produce data on the change in the number of people unemployed and the unemployment rate.
