By Rebecca Howard
May 9 (BusinessDesk) - The New Zealand dollar was weaker after the domestic central bank cut rates to a record low 1.50 percent and as markets await news on the latest US-China trade talks.
The kiwi was trading at 65.73 US cents at 7:45am in Wellington versus 65.89 US cents at 5pm. The trade-weighted index eased to 71.87 from 71.90.
The kiwi took a tumble when the central bank cut the rate and rejigged its forecasts to show another cut is possible. Most economists are forecasting another cut this year and markets have a cut fully priced-in by March next year.
However, central bank governor Adrian Orr stopped short of "promising further aggressive action" and the kiwi recovered as markets judged his tone to be fairly neutral, ANZ Bank senior economist Miles Workman said. ANZ is expecting two more rate cuts, one by November and one in February.
Orr is due to appear this morning before a parliamentary committee and may offer more clues as to what the bank's next move might be.
However, "US-China headlines continue to dominate" with talks due to resume later in the global trading day in Washington, said Mike Shirley, a dealer at Kiwibank.
Markets were jittery after US President Donald Trump tweeted he would be happy to keep tariffs on Chinese imports and China warned it would retaliate.
China backtracked late last week on almost all aspects of a draft trade agreement, threatening to blow up the negotiations, Reuters reported earlier in the day, citing US government and private-sector sources.
The domestic currency was trading at 94.02 Australian cents from 93.79, at 50.53 British pence from 50.38, at 58.70 euro cents from 58.78, at 72.35 Japanese yen from 72.44, and at 4.4577 Chinese yuan from 4.4602.