Investing.com - The New Zealand dollar tumbled over 1% to hit an almost five-year low against its U.S. counterpart on Thursday, after the Reserve Bank of New Zealand unexpectedly lowered interest rates by 0,25% and said the local currency needs to weaken further.
NZD/USD hit 0.6998 during late Asian trade, the pair's lowest since September 2010; the pair subsequently consolidated at 0.7022, plummeting 1.37%.
The pair was likely to find support at 0.6983 and resistance at 0.7120, the session high.
Earlier Thursday, the RBNZ unexpectedly cut its benchmark interest rate to a record-low 3.25% from 3.50%. It was the first time the central bank lowered rates since 2011.
Commenting on the decision, RBNZ Governor Graeme Wheeler said the central bank has factored in another rate cut into its forecasts and is looking for a further fall in the local currency.
Meanwhile, the greenback regained some strength after weakening broadly on Wednesday as investors looked ahead to U.S. retail sales and jobless claims data due later in the day for further indications on the strength of the economy.
The kiwi was also sharply lower against the euro, with EUR/NZD surging 2.49% to 1.6110.