The New Zealand dollar skidded to 10-week lows versus the greenback and a 19-year trough against its Australian counterpart on Wednesday after New Zealand's Prime Minister said he would welcome a cut in domestic interest rates. The kiwi dollar fell more than 1 percent to $0.7385 as stops were triggered and as the market sold the currency against the Australian dollar. It last traded at $0.7406.
New Zealand interest rate swaps tumbled across the curve, driving the two-year Australia/New Zealand swap spread to the widest on record near 200 basis points. The Aussie dollar flying to a 19-year high of NZ$1.3669, with heavy stop-loss buy orders triggered on the break above $1.3570. The Aussie has risen more than 4 percent against the kiwi so far this year on diverging outlooks for rates between the two countries.
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