The New Zealand dollar ended a rough week 2.7 per cent lower against the US dollar than where it started.
It closed on US64.50c from US64.98c at 5pm yesterday. It began the week at US66.28c.
The New Zealand dollar's heavy fall against the aussie also continued, with the kiwi closing on a 22-month low of A87.90c from A88.37c yesterday and A89.59c at the start of the week.
Traders have been dumping the kiwi on expectations that interest rates here will fall while those in US, Europe and Japan will rise.
That is despite Reserve Bank Governor Alan Bollard yesterday saying it was unlikely rates here would be cut this year.
A Reuters poll conducted after the rate announcement showed eight of 15 economists surveyed expect lower rates by the end of third quarter.
Yesterday's ugly terms of trade data did nothing to ease bearish sentiment on the kiwi.
ANZ Bank said the kiwi was likely to test support levels as it headed toward a medium-term target of US63.20c.
The bank said that on the Australian cross rate, the kiwi's failure to break back over A89c was "an ominous sign".
"With fourth quarter balance of payments and GDP fast approaching, the downside of this cross looks extremely vulnerable."
The Australian dollar ended little changed against the US dollar at US73.45c from yesterday's close.
The US dollar hit a two-week high against the yen on growing views that the Bank of Japan's scrapping of its five-year-old hyper-loose policy would not stem capital outflows from Japan.
It drew support from chances that a solid reading in US jobs data could fuel expectations the Federal Reserve will raise interest rates beyond 5.0 per cent, compared with 4.5 per cent now.
With the BOJ expected to keep interest rates near zero for the next few months, the dollar's hefty yield advantage will be irresistible for many investors, traders said.
The dollar shrugged off news the US trade deficit widened to a record US$68.5 billion ($107 billion) in January, beyond the US$66.5 billion forecast by analysts.
"The fact that the dollar rose even after the record US trade deficit seems to suggest there are so many investors out there who want to buy the dollar," said Mitsuru Sahara, forex manager at Bank of Tokyo-Mitsubishi UFJ.
In early Asian trade, the dollar rose as high as 118.64 yen - its highest in two weeks - helped by buying by Japanese investors and importers.
5pm today 5pm Thursday
NZ dlr US64.55c US64.98c
NZ dlr/Aust dlr A87.90c A88.37c
NZ dlr/euro 0.5425 0.5445
NZ dlr/yen 76.53 76.48
NZ dlr/stg 37.20p 37.42p
NZ TWI 66.78 67.07
Australian dollar US73.45c US73.51c
Euro/US dollar US1.1898 US1.1931
US dollar/yen 118.48 117.73
- NZPA
<EM>Currency:</EM> Dollar ends week lower
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