Kiwi dollar falls sharply

The New Zealand dollar fell sharply against major currencies early today, alongside tumbling share prices in the United States.

By 8am the NZ dollar was buying US67.46c from US68.64c at 5pm yesterday. The kiwi got down to around US67.20c at one point, its lowest level in nearly two weeks.

US stocks fell as investors fretted that chatter from hedge funds on a bank failure could prove accurate.

The decline came despite upbeat economic news from the US and euro zone as well as a stabilisation in Chinese shares after a rout on Monday.

The hedge fund talk "is a huge driver" of currency markets, said Dan Cook, senior market analyst at IG Markets in Chicago.

"When you have data like we had but the Dow drops, people are running for that safe haven."

ANZ bank said support levels for the NZ dollar had been tested and broken with relative ease.

"Risk went running for cover, and commodities along with the NZD and AUD got heavily sold."

ANZ asked whether the decline in the NZ dollar could be the start of a long awaited correction.

The kiwi was also down to 0.4745 euro at the local open from 0.4781 at 5pm, and fell to 62.67 yen at 8am from 63.55 at yesterday's local close.

Against the Australian dollar, the kiwi was barely changed at A81.59c, while the trade weighted index dropped to 62.89 at 8am from 63.55 at 5pm.

- NZPA