Investing.com - The New Zealand dollar hit fresh four-year lows against its U.S. counterpart on Tuesday, as the currency reacted to news of a surprise rate cut by the Reserve Bank of Australia and as markets 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 pair was likely to find support at 0.7113 and resistance at 0.7330, Monday's high.
The New Zealand dollar was hit 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.
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.
Separate reports showed that 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 the country'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.
Analysts 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, the U.S. was to release data on factory orders, while New Zealand was to produce data on the change in the number of people unemployed and the unemployment rate.