New Zealand dollar hits five-year low on rate cut

London

THE New Zealand dollar slumped 2.6 per cent to a five-year low against the US dollar on Thursday, after the Reserve Bank of New Zealand cut interest rates and suggested more easing may follow. The kiwi was on track for its biggest daily loss in four years, dropping to US$0.6998 in early London trade, as the RBNZ began an easing cycle just as the Federal Reserve looks to raise US rates, possibly later this year. "The RBNZ move was a surprise and has taken a toll on the kiwi," said Geoff Yu, currency strategist at UBS, London.

The US dollar rose against a basket of currencies before US retail sales data are released later in the day, and regained some poise against the yen.