NZ dollar heads for 81 US cents

File photo

The New Zealand dollar is plunging this afternoon towards 81 US cents.
The kiwi was trading at 81.09 US cents at 3.25 pm, a little over an hour after a magnitude 6.1 aftershock hit Christchurch, after another big shake measuring 5.5 rocked the city's seaward suburbs, crushing buildings and doing major new infrastructural damage.

The New Zealand dollar fell heavily for the second time this afternoon after a second major aftershock hit Christchurch, losing 90 basis points to trade at 81.35 US cents immediately after the 2.20 p.m. aftershock, which measured more than magnitude 6.0. Both quakes have caused further major infrastructure damage.

The first large aftershock, measuring 5.5, had already knocked half a U.S. cent off the kiwi.

Roads are damaged, a further collapse is reported at the Christchurch Cathedral and Mayor Bob Parker is thankful the central business district "red zone" had been evacuated after the 5.5 shake.

Today's damage spells more unknown, but substantial cost to the insurance industry, the New Zealand Government, and to the country's economic performance.

Christchurch retail statistics had been showing the city finally getting back to normal after the Feb. 22 6.6 magnitude aftershock, which brought down large parts of the CBD, and caused the loss of 181 lives.

The kiwi has recently touched a 26 year post-float high of 83 US cents, threatening booming export returns and perplexing the Governor of the Reserve Bank of New Zealand, Dr Alan Bollard, who signalled an earlier return to interest rate rises than previously expected in last Thursday's Monetary Policy Statement.