The kiwi dollar sank today to new multi month lows against the US dollar, euro, Australian dollar and sterling today.
It faltered overnight, following comments by the Prime Minister that the currency was not weak, and then tried in vain to rally.
"I think we should see what's happening in the currency, which is still strong, as positive for exporting," Helen Clark told reporters in Manila yesterday.
"The extent to which the currency has come off the peak to the level of around 64 cents at the present time will be seen as a tremendous impetus to exporting," Miss Clark said.
Trade minister Phil Goff weighed in with comments in Dubai that exporters would favour a currency between US59c and US65c.
Dealers said the comments appeared to sanction the kiwi's easing.
ANZ Investment Bank chief dealer Murray Hindley said there was good demand from domestic exporters in the morning, but that was overwhelmed by Asian trader selling based on bearish sentiment.
The kiwi was now struggling for support at US63c. It closed the week near a 20 month low of US63.68c, the best part of a cent lower than yesterday's US64.46c close.
The story was no better against the Australian dollar which closed at a new two-year low of A85.92c from A87.33c yesterday.
The trade weighted index fell a full point to 65.26 -- it's lowest level since August 2004. Next week is expected to see fresh pressure on the kiwi from quarterly current account and GDP data that is expected to paint a bleak picture of the economy.
The US dollar hovered near a seven-week low against the euro, staying on the back foot after a soft inflation report that suggested the Federal Reserve's tightening campaign could be drawing to a close.
Economic data added to speculation that the Fed may have little reason to extend its rate-rising campaign much further.
"It's starting to look as if US rates may peak by the middle of this year, which would imply that any further gains for the dollar are going to be pretty limited," said Katsunori Kitakura, senior forex trader at Chuo Mitsui Trust and Banking.
- NZPA
<EM>Currency:</EM> Dollar sinks to new lows
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