"The Aussie is definitely where the action is today," Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California. "The language was a bit more dovish than expected," he said. The policy shift caught some investors off-guard as the previous day the Reserve Bank of Australia had steered clear of an easing signal when holding its official cash rate at a record low 1.50 percent.
The Aussie was 1.48 percent lower at $0.713, on pace for its worst one-day decline in a year. The sharp selloff also weighed on the New Zealand dollar and the Canadian dollar with both these currencies logging declines against their U.S. counterpart.
Lowe's speech highlighted a difficult balancing act facing policymakers as they try to manage market expectations and ease pressure on growth. Sterling steadied on Wednesday but held near a two-week low as investors mulled a report that UK cabinet ministers are discussing plans to delay Brexit by eight weeks.