Australian dollar

The Australian dollar extended declines after the Reserve Bank of Australia cut interest rates by more than economists estimated, reducing investor appetite for higher-yielding assets. New Zealand's currency also fell.

Australia's dollar slid 2.5 percent to 66.49 U.S. cents as of 4:34 p.m. in Sydney from 68.06 cents late in Asia yesterday. It traded at 67.17 cents just before the RBA announced the 0.75 percentage point cut to 5.25 percent at 2:30 p.m. The currency bought 65.41 yen from 66.34 before the decision.

``The Aussie might come under downside pressure from the bigger rate cut,'' said Besa Deda, acting chief economist and strategist at St. George Bank Ltd. in Sydney, referring to the currency by its nickname. ``Clearly, international conditions, with further signs that China is slowing, are one of the key factors for the RBA to cut rates.''

Fifteen of 16 economists surveyed by Bloomberg News forecast a 50 basis-point cut, with one predicting 25 basis points. Today's decision follows a 1 percentage point reduction last month, the bank's biggest cut since May 1992 as the economy was emerging from a recession.

New Zealand's dollar declined 0.9 percent to 58.70 U.S. cents from 59.23 cents. It bought 57.90 yen from 58.81.

Australia's currency has plunged 29 percent against the dollar over the past three months and 35 percent versus the yen after the collapse of Lehman Brothers Holdings Inc. froze credit markets and prompted investors to dump higher-yielding assets on concern over a global recession. New Zealand's dollar is 20 percent and 27 percent lower versus the greenback and the yen, respectively.