KEY POINTS:
The New Zealand dollar lost another cent today against the US dollar and has now lost 3.5 cents, or 5 percent, since Monday as credit concerns have re-emerged around the world.
Having been at a near-two week high around US72.75c to the greenback on Monday evening, the kiwi fell today to US68.70c before closing on US69.30c.
Westpac currency strategist Michael Gordon said the kiwi's fate was sealed overnight when Wall Street dropped 2 percent and more stories emerged about credit worries.
Mr Gordon said many investors thought the worst of the credit storm had been seen a week ago, but he said it was more like having gone into the eye out into the other side again.
"We could be in for a few more torrid days."
Concern in the US centred on company State Street.
Mr Gordon said Japanese and US investors were both sellers and buyers today.
A report showing US home prices fell the most year-on-year in the second quarter to the worst decline in at least 20 years gave dealers more reason to exit carry trades.
"The carry-trade unwind likely has further to run," said currency strategists at Citigroup in a note to clients, adding that they expect more gains in the yen and Swiss franc and losses in the Australian and New Zealand dollars as well as the pound.
ANZ bank said some yield demand overnight had sparked minor hopes of a recovery only to be thwarted by the weaker equity market in the United States.
Meanwhile, against the yen the NZ dollar, which has the highest yield in the industrialised world, was flirting with the largest monthly decline since October 1987, according to Reuters data. It has lost 13 percent.
It lost another two yen today, dropping to 79.31 from 81.42 yen.
Against the Australian dollar the kiwi closed on A85.65c from A85.90c yesterday.
ANZ said increasing expectations of sooner than previously forecast NZ interest rate cuts with little chance of similar moves in Australia had led to further falls in the cross rate.
The trade weighted index closed on 66.94 from 67.98 at 5.20pm yesterday.
The US dollar and euro lost more ground after sliding more than 1 percent against the Japanese currency the previous day.
Reuters currency rates:
5pm today 5.20pm yesterday
NZ dlr/US dlr US69.30c US70.52c
NZ dlr/Aust dlr A85.65c A85.90c
NZ dlr/euro 0.5199 0.5177
NZ dlr/yen 79.31 81.42
NZ dlr/stg 34.62p 35.17p
NZ TWI 66.94 67.98
Australian dollar US80.87c US82.11c
Euro/US dollar 1.3596 1.3624
US dollar/yen 114.38 115.45
- NZPA
