The New Zealand dollar fell over half a US cent after Prime Minister John Key indicated the kiwi has room to fall and its current strength could stifle the local economy.
The New Zealand dollar fell to 81.46 US cents at 8am from 82.02 cents yesterday at 5pm. The trade weighted index decreased to 73.22 from 73.54.
The kiwi has been one of the best-performing Group of 10 currencies this year, pushing toward new highs on all the crosses except against Australia's dollar.
Key told Bloomberg News that one-way bets on continued strength in the New Zealand dollar were "not a very smart thing to do". He also said the high dollar "takes the pressure off the Reserve Bank" to raise rates.
"So the fact the New Zealand dollar spent most of this morning on the back foot likely reflects a delayed reaction to some comments from Prime Minister Key last night," said Mike Jones, market strategist at Bank of New Zealand.