The New Zealand dollar rallied by more than half a US cent after the Reserve Bank cut its official cash rate by 25 basis points to 1.75 percent, based on market expectations that the move would be the last in the current easing cycle.
The Kiwi went from US$72.83 just before the 9am announcement to US73.6c immediately after, before returning to around US73.44c by 9.12 am.
Economists were widely expecting the cut, but don't believe it will bring fixed term mortgage rates down and instead they are likely to head upwards on the back of rising international borrowing costs for the banks.
ASB last Friday increased its three-year standard fixed term rate from 4.89 percent to 5.09 percent and lifted its five-year standard rate from 5.29 percent to 5.49 percent.
BNZ on Tuesday announced it would increase its three-year fixed home-loan rate by 10 basis points to 4.59 percent from today.