▸ Pro­spect of fur­ther rate cuts drags New Zea­l­and dol­lar lower

▸ Eco­nom­ists note ‘big shift in tone’ from pre­vi­ous meet­ing of NZ cent­ral bank

▸ Ana­lysts argue that forex trades do not sig­nal a resur­gence for US dol­lar

The New Zea­l­and dol­lar slumped to a four-month low after the coun­try's cent­ral bank lowered interest rates and sig­nalled fur­ther cuts to com­bat a weak domestic eco­nomy and global uncer­tainty over Pres­id­ent Don­ald Trump's US tar­iffs.

The Reserve Bank of New Zea­l­and cut interest rates by a quarter of a per­cent­age point to 3 per cent — as expec­ted — but said two of the six mem­bers of its Mon­et­ary Policy Com­mit­tee voted for a big­ger cut of half a per­cent­age point.

Eco­nom­ists at RBC Cap­ital Mar­kets said the out­look rep­res­en­ted a “big shift in tone” from the July meet­ing when the cent­ral bank held interest rates amid con­cerns over infla­tion.

ANZ, the Aus­tralian bank, said it now expec­ted two fur­ther interest rate cuts after the dovish pivot.

The New Zea­l­and dol­lar fell 1.1 per cent against the US dol­lar to a four-month low.