The Aussie dollar hit a fresh one-year trough on Tuesday after a the Reserve Bank of Australia (RBA) surprised by opening the door to a rate as early as next month, while the New Zealand dollar plumbed a six-month low on a global flight to safety.
The Aussie fell as deep as $0.9454, down about half a cent, after the RBA said an improved inflation outlook would increase the scope for stimulus. It was last at $0.9507, having lost 1.7 percent so far this week. The New Zealand dollar skidded as low as $0.7495, its weakest level since March, from $0.7527 in New York, before trimming some of the day's losses. It was last at $0.7555.
The Aussie slipped to a one-week low of NZ$1.2534, from NZ$1.2682, as expectations for interest rates diverged further. Market pricing implies 17 bps of rate hikes in New Zealand over the next 12 months, compared with 163 bps of cuts in Australia. Against the safe-haven yen, the Aussie tumbled 2.4 percent to 72.45 , the lowest since May last year, while the kiwi stood at a six-month low of 57.51 yen.
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