The Reserve Bank of New Zealand cut its benchmark interest rate by 25 basis points to 2.75% from 3.0% as widely expected and said further rate cuts are likely if their economy will decline by the negative effects of another sharp fall in China's economy. (21:00 GMT Wednesday)
The new zealand dollar plummeted to the initial low of 0.6270 from 0.6400 (-130 pips) and was pushed even lower to the intraday low of 0.6255 in the prior Asian session. (-145 pips from 0.6400 or 2.26 percent).
The RBNZ Governor Graeme Wheeler said a big slowdown in China's economy could have a nagative impact on New Zealand, emphasizing on the growing concerns and fears of the risk of a hard landing in China's economy.
The kiwi was well supported at 0.6250 and profit taking ensued in the European market bouncing to 0.6338 and traded at the 0.6300 level prior to the NY open.
Chart: WorldWideMarkets Alpha Trader