The New Zealand dollar plunged Wednesday after the Reserve Bank of New Zealand cut its official cash interest rate by 25 basis points to 2.25%. Most analysts believed the RBNZ would opt to leave rates on hold in March, though many expected a cut would follow some time this year, according to Marshall Gittler, head of FX research at FX Primus. Policy makers said the outlook for global growth has deteriorated since December, largely due to weaker growth in China and other emerging markets, as well as slower growth in Europe. The kiwi traded at 66.47 cents in recent trade, compared with 67.44 cents late Tuesday in New York.
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