The New Zealand dollar slunk under US60c to fresh 22-month lows today.
At 5pm today the kiwi was buying US59.95c, after falling on news of an interest rate rise in the United States. This was more than US1c lower than the US61.10c it was fetching at yesterday's local close.
Manager of BNZ's foreign exchange desk Brendan Marsh said the kiwi looked set to test the US59.50c to US59.00c support level over the next couple of days.
Mr Marsh said there was a reasonable amount of locally sourced demand for the kiwi, as exporters sought to take advantage of the currency's weakness, but the offshore bias was to sell the New Zealand dollar.
He said the kiwi had faced heavy selling in Japan.
"With month-end, or financial year-end, approaching for many of the Japanese institutions there has been continued selling of the kiwi in Japan."
The kiwi was also lower against the Australian dollar, falling to A85.41c at 5pm, from A85.97c at 5pm yesterday.
The trade weighted index, which measures the New Zealand dollar against a basket of currencies, fell to 62.34 from 63.29 at the end of yesterday's local session.
Currencies were weaker across the board against the greenback today after the US Federal Reserve hiked its official interest rate for the 15th straight time.
New Fed chairman Ben Bernanke followed the Alan Greenspan inflation-fighting formula, hiking the federal funds rate to 4.75 per cent -- its highest in five years.
That narrowed the gap with New Zealand's official cash rate, at 7.25 per cent.
Fed officials left the door open for further rate increases, while in New Zealand there is an 80 per cent expectation among forecasters that the Reserve Bank will cut rates from July.
The New Zealand dollar staged a brief rally yesterday after Finance Minister Michael Cullen said the country was not facing a deep downturn.
The local unit faced a fresh wave of sellers in offshore trading, however.
The following are Reuters currency rates:
5pm today 5pm Tuesday
NZ dlr US59.95c US61.10c
NZ dlr/Aust dlr A85.41c A85.97c
NZ dlr/euro 0.4996 0.5090
NZ dlr/yen 70.67 71.52
NZ dlr/stg 34.40p 34.99p
NZ TWI 62.34 63.29
Australian dollar US70.21c US71.06c
Euro/US dollar US1.2001 US1.2004
US dollar/yen 117.86 117.05
- NZPA
<EM>Currency:</EM> Kiwi falls under US60c
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