The New Zealand dollar extended its slide, nearing 69 US cents and sinking to a three-month low against the Aussie after last week's dovish Reserve Bank statement gave investors less reason to hold the local currency.
The kiwi dollar fell to 69.11 US cents as at 8am from 69.61 cents late yesterday. It dropped to 91.80 Australian cents from 92.15 cents yesterday.
Last week the Reserve Bank indicated that interest rates would stay at record low levels through until early 2020 as inflation remains low, keeping it out of step with the Federal Reserve, which is signalling two-to-three more rate hikes this year. Minutes of the last Reserve Bank of Australia policy meeting, due out today, will show whether policymakers across the Tasman are taking such a dovish view, and traders will also be watching for a speech from RBA deputy governor Guy Debelle.
"The NZD has been on the back foot since Thursday’s dovish Reserve Bank statement and has been unable to sustain any sort of rally," traders at HiFX said in a note. "In the absence of any notable economic data releases currency markets have had a slow start to the week with the NZD the notable underperformer."
With no economic data scheduled in New Zealand today, the latest Global Dairy Trade auction tonight will be a highlight. Traders have been mulling the spread of Mycoplasma bovis, the cattle disease that was confirmed in the Waikato region yesterday and has led to the planned cull of 22,000 cows to date. While that is tiny against the approximately 1 million cows culled each year in the normal course of the dairy industry, the spread of the disease, which is endemic in many other countries, is undermining confidence in the sector.
The trade-weighted index fell to 72.20 from 72.62.
The kiwi fell to 57.90 euro cents from 58.21 cents yesterday. European Central Bank Governing Council member Francois Villeroy de Galhau said he sees the current slowdown in inflation as temporary and indicated the end to low interest rates may come in quarters not years.
The kiwi traded at 4.3788 yuan from 4.4122 yuan yesterday ahead of April industrial production figures in China today. It fell to 50.97 British pence from 51.32 pence and fell to 75.77 yen from 76.14 yen.