New Zealand Dollar Weakens As Central Bank Leaves Interest Rates Unchanged

The New Zealand dollar weakened against its U.S. rival on Wednesday after the country's central bank left its benchmark interest rate unchanged. The Reserve Bank of New Zealand left its benchmark cash rate unchanged at 1.75%. In a statement, the central bank added that it expects interest rates to remain low for a "considerable time." The kiwi was down 0.3% at 72.70 U.S. cents, compared with 72.95 U.S. cents late Tuesday in New York. Typically, lower interest rates, or the expectation that rates will fall or remain low, cause a currency to weaken because it diminishes the return on assets denominated in that currency. The central bank cut the benchmark rate by a quarter of a percentage point in November. The central bank was widely expected to keep interest rates on hold, according to currency strategists at Brown Brothers Harriman.