The New Zealand dollar fell more than a US cent to its lowest level in nearly four years after the Reserve Bank opened the door to possible interest rate cuts in the future.
The currency fell as low as 73.1 US cents, its lowest level since March 2011, from 74.44 cents immediately before the central bank's statement at 9am today.
Reserve Bank governor Graeme Wheeler said he expected to keep the Official Cash Rate (OCR) on hold for some time and that future moves would depend on emerging economic data.
Westpac chief economist Dominick Stephens said it was a watershed moment for the central bank governor, who went further than expected.
"We certainly expected the Reserve Bank to remove any talk of hiking the OCR, but they've actually gone a little bit further than that and opened the possibility that the next move in the OCR could actually be down."
"I give the odds of the next move being down at roughly 20 percent," he said.
The New Zealand dollar was also negatively impacted in early trading by a US Federal Reserve statement, indicating it was still on track to raise interest rates, perhaps later this year.