Wellington, Dec 4 NZPA - The New Zealand dollar was trading lower against the US dollar and yen this morning, but higher against other currencies, as the market awaited a new official cash rate. At 8am the kiwi was at US52.92c and 49.08 yen, compared with US53.15c and 49.65 yen at 5pm yesterday.

The trade weighted index firmed to 53.90 at 8am from 53.15.

Reserve Bank Governor Alan Bollard was expected to make another substantial cut in the official cash rate this morning.

Reuters reported that the US dollar and yen rallied against major currencies overnight, reflecting heightened risk aversion as investors cut back on investments in higher-yielding assets, though gains eased as stocks rose.

Currency moves were heavily influenced by expectations for interest rate cuts by central banks in the euro zone, Britain, Sweden, as well as New Zealand, to counter the threat of deflation.

Investors have flocked to the dollar and the yen on the view that other central banks have more scope to cut rates than the Bank of Japan and the US Federal Reserve, whose rates are already low.

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