The dollar sank below 62USc for the first time in 22 months yesterday ahead of data today and tomorrow expected to show that New Zealand is sinking deeper into debt and economic growth is slowing.
The kiwi dipped to a low of 61.80USc in afternoon trade, a level not seen since May 2004, then closed at 5pm at 61.90USc.
"The market is negative towards the economy and the belief is the currency should be pushed lower," said Derek Rankin, director of Bancorp Treasury Services.
"It sounds trite to say it, but there are more sellers than buyers - and there are no buyers."
The fall came in advance of today's balance of payments data, which is expected to show the current account deficit widened to nearly 9 per cent of gross domestic product, and tomorrow's gross domestic product release, which is expected to show the economy grew just 0.2 per cent in the December quarter.
"There's a lot of speculative players who have been selling recently, looking to drive it lower," said Rankin.
Hedge funds and other major currency investors are seeking to profit from the kiwi's expected fall this year.
However, Rankin said that after the currency's steep fall - 7USc in seven weeks - the dollar could bounce.
Debt and slowdown fears hit kiwi
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