The kiwi was down 0.44% by 0357 GMT, at $0.6266. It went as deep as $0.6257 after the ANZ survey showed business confidence had plummeted to an 11-1/2-year trough. The kiwi is now within a whisker of a four-year low of $0.6255 touched last week.
The Australian dollar was down 0.15% at $0.6757 with financial futures pricing in a 76.5% probability of a policy easing by the Reserve Bank of Australia (RBA) at its October 1 policy meeting.
Australian government bond futures were mixed, with the three-year bond contract unchanged at 99.33. The 10-year contract slipped 2.5 ticks at 99.035. The fall in business confidence came despite a larger-than-expected cut to the official cash rate (OCR) by the Reserve Bank of New Zealand (RBNZ) last month, to a record low of 1%.
"Persistently weak sentiment maintains the case for additional policy support," said Mark Smith, a senior economist at ASB Bank. "We expect the RBNZ to cut the OCR another 25 basis points in November 2019, to 0.75%, with growing risk of further cuts beyond."
Financial markets are pricing in a two in three chance of a cut to 0.75% in November. Investors will next keep an eye on a quarterly survey of businesses from the New Zealand Institute of Economic Research due on Tuesday. A majority of 35 economists polled by Reuters expect the RBA to cut the cash rate for the third time this year. The Aussie has been on a downtrend since the middle of this month after minutes of the RBA's September meeting showed its board was prepared to ease policy again if needed.