KEY POINTS:
The New Zealand dollar lost around half a cent today in response to a fresh bout of selling on world equity markets and after weak local retail sales data.
Wall Street fell heavily after credit rating agency Moody's Investors Service cut bond insurer FGIC Corp's "AAA" rating, heightening concern that credit markets will destabilise further.
US Federal Reserve chairman Ben Bernanke said he sees investment banks taking more write-downs on losses from subprime mortgages.
That sent currency traders scurrying for safety and avoiding carry trade currrencies such as the kiwi.
Traders were given another excuse to sell the kiwi when retail figures showed sales, excluding cars, were flat in the December quarter.
That suggests the Reserve Bank may be able to ease rates sooner than some anticipate.
Goldman Sachs JBWere economists Shamubeel Eaqub said activity had slowed considerably "and the Reserve Bank has been looking backwards far too much".
"The economy is slowing and the risks are skewed to the downside. We're sticking by our mid-year rate cut forecast."
The kiwi closed on US78.47c from its US79.03c opening, having been at a week-low below US78.20c little more than 24 hours earlier.
Against the aussie, it fell to A86.96c from its A87.51c opening.
Strong employment data in Australia pushed up expectations of another rate rise there.
The New Zealand dollar lost on all its crosses and the trade-weighted index ended on 72.23 from 72.45 at the same time yesterday.
- NZPA