AUD/USD prints lowest level since March 2009

• AUD/USD tracks NZD/USD lower, drops to the lowest level since March 2009.
• The RBNZ cut rates by 50 basis points earlier today.
• RBNZ's aggressive easing to put pressure on the RBA to do more.

A bigger-than-expected interest rate cut by the Reserve Bank of New Zealand and the resulting drop in the NZD/USD is dragging in the AUD/USD pair lower.  

AUD/USD is currently trading at 0.6724, the lowest level since March 2009, representing 0.54% losses on the day.

New Zealand's central bank cut the official cash rate (OCR) to 1% from 1.5% earlier today. The market, which was priced for a quarter-point rate cut, offered NZD in response to the bigger-than-expected rate cut.

The aggressive easing by the RBNZ will likely put pressure on the Reserve Bank of Australia (RBA) to ease further, having delivered 25 basis point rate cuts in June and July. As of now, the official interest rate in Australia is 1%. Markets expect the RBA to cut rates to 0.75% before the year-end. With RBN's aggressive easing, the market may begin pricing in the possibility of two or more rate cuts by the RBA before Dec. 31.

The AUD, therefore, could continue to lose ground during the day ahead. The Aussie data released earlier today disappointed expectations. Australian home loans declined by 0.9% in June, missing the estimated growth of 0.6% by a big margin.

Pivot levels