WELLINGTON - The New Zealand dollar yesterday came under siege from hedge funds and bond sellers, and dived more than three-quarters of a US cent to almost a 14-year low.
But dealers said the drop to the day's low of 47.85USc - a level not reached since September 1986 - was not a reflection of any additional fundamental weakness.
"We've been hauled lower with the Aussie dollar, its weakness generated by the weak retail sales yesterday," said Citibank senior dealer Dean Sheridan.
"We saw quite large selling interest from some of the hedge funds."
About 10 am, the funds took advantage of the absence of exporter buying to push the kiwi down, hoping to re-enter at a lower level later.
But the New Zealand dollar finished off its lows, at 47.97USc compared with 48.83USc on Monday.
Dealers said additional depreciation was likely as the Australian dollar headed lower.
The Australian dollar continues to suffer from worries regarding the spread between Australian and American interest rates.
Those worries were compounded yesterday by weaker-than-expected retail sales figures and soft job advertisements.-NZPA
Dollar plunges to near 14-year low
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