The New Zealand dollar fell against the greenback, with the currency unable to sustain its post-budget momentum in the face of declining commodity prices.
The kiwi dollar yesterday climbed after Finance Minister Bill English delivered his austerity budget, which put New Zealand on course to return to surplus by 2015by aggressively slashing government spending.
Standard & Poor's and Fitch Ratings left the country's credit rating unchanged at AA+ with a negative outlook. Commodities fell, with the Thompson Reuters Jefferies CRB Index dropping 1.4 per cent to 339.30, near a two-month low.
"The budget was favourably received, but there wasn't quite enough momentum to break through the topside resistance level," said Alex Sinton, a senior dealer at ANZ New Zealand. "I expect for the rest of the day we'll see further consolidation above the key support area of 78.50 (US cents)."
The kiwi recently traded at 78.98 US cents, down from 79.15 cents yesterday, and declined to 68.31 on the trade-weighted index of major trading partners' currencies from 68.54 yesterday.
It dropped to 74 Australian cents from 74.28 cents previously, and slipped to 64.38 yen from 64.72 yen.
It fell to 55.17 euro cents from 55.58 cents yesterday, and declined to 48.68 pence from 49 pence previously.
Fresh fears around the pace of the US recovery emerged after the Philadelphia Fed's Business Outlook Survey for May fell 14.6 points to 3.9, its lowest reading since October 2010 and well short of the increase 20 expected by the market.
That follows a sharp fall in April, when the index dropped to 18.5 from 43.4, suggesting that manufacturing activity is now barely expanding in the Philadelphia region.
Locally, currency traders will be waiting for the release of travel and migration data for April, which is likely to show more Christchurch residents leaving the country in the wake of the February earthquake.
The Reserve Bank is also set to release credit card data for April, which will provide a read into outstanding balances, limits and interest rates.
The kiwi dollar may trade between a range of 78.68 US cents and 79.42 cents, Sinton said.
