The New Zealand dollar sank below US68c to a 3-1/2 month low today despite fresh labour data increasing pressure on interest rates.
The kiwi closed on US67.68c from its US67.90c opening and US68.24c at 5pm yesterday.
The US dollar was strong against all major currencies. It jumped to a two-year high against the euro and hovered near a two-year peak versus the yen, buoyed by a widening yield advantage as investors looked to see whether the US currency can extend its rally.
The US dollar's rally picked up steam on Friday after the currency successfully broke through what had been tough resistance around the $US1.1870 level against the euro and hit new highs, prompting waves of buying.
The Australian dollar dropped to US72.98c from US73.32c here yesterday while the kiwi cross rate picked up during the session but still closed lower at A92.75c than yesterday's A93.07c close.
Labour cost and wage data showed pressure on wage rates was much higher than expected.
The Labour Cost Index (LCI) of private salaries and wages rose 0.8 percent on the previous quarter, and 2.8 percent for the September year.
The increases were the largest since the series began in 1992.
The data increases pressure on the Reserve Bank, which had already been expected to hike interest rates again next month to try and contain annual inflation of over 3 percent.
BNZ currency strategist Sue Trinh said the New Zealand dollar was nearing support levels and its decline should slow in coming sessions.
"The New Zealand dollar should be supported by US67.70c-US67.80c, but investors/traders should be getting used to the idea that levels above US71c are but a distant memory," she said.
The following are Reuters currency rates:
NZ dlr US67.68c US68.24c
NZ dlr/Aust dlr A92.75c A93.07c
NZ dlr/euro 0.5773 0.5775
NZ dlr/yen 79.75 80.36
NZ dlr/stg 38.94p 38.96p
NZ TWI 70.30 70.61
Australian dollar US72.98c US73.32c
Euro/US dollar US1.1728 US1.1817
US dollar/yen 117.76 117.78
- NZPA
<EM>Currency:</EM> Kiwi falls to lowest since July
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