The Kiwi dollar fell to US71.38c at 5 pm today, from US72.04c on Wednesday. Photo / Greg Bowker
The New Zealand dollar saw its biggest one-day fall since November as the greenback strengthened sharply after a speech by the chair of the US Federal Reserve Janet Yellen, in which she said the world's largest economy was getting to the stage at which it could operate without the emergency
support introduced since the global financial crisis in 2008.
The local currency fell to US71.38c at 5pm today, from US71.64c at 8 am and US72.04c yesterday. A peak to trough loss of 1.3 per cent today was the biggest fall in percentage terms since November 9, Reuters reported. The trade-weighted index fell to 78.31 from 78.72.
The Federal Reserve slashed interest rates to near zero and introduced a policy of quantitative easing in response to the GFC, but has slowly been looking to wean the economy off the stimulus it introduced. In December last year, the Fed raised rates for the second time since the crisis, to a range of 0.5 to 0.75 per cent.
Sheldon Slabbert, a sales trader at CMC Markets in Auckland, said the Federal Reserve was remaining quite hawkish in its attitude to interest rates.
"Janet Yellen talked this morning, we're still looking at probably two to three interest hikes, but I'm a little unconvinced at this point, four were promised last year, we only got one," he said.
