The New Zealand dollar tumbled more than 2 per cent in the last 24 hours to strike three-month lows yesterday.
By 5pm the kiwi had fallen to US45.35c, down from Monday's close of US46.34c, while the aussie slipped to US52.66c from US53.85c.
Graeme Blackwood of Deutsche Bank said the kiwi gave back its gains made against the aussie overnight, when the aussie shed $US1.30 at one point.
"Short of that it's been pretty much on hold. I think the market's reluctant to take it too much lower just at the moment...(but) the risk is for further weakness from here," Mr Blackwood said.
The kiwi traded between US45.30/77c yesterday, with support at US45.40c despite the brief foray 10 points lower.
"We're back to the old risk aversion," he said.
"There was some concerted selling in the aussie overnight which led the New Zealand dollar lower, and the weakness in the US stockmarkets...the New Zealand and Australian dollar economies aren't going to fare so well in that environment, so consequently the currency's suffering."
Overnight, the kiwi was likely to remain under US46c, and have a new range in the next few weeks of US44.80c and US45.80c.
Basil Payn, chief currency dealer at Westpac, said continued concern about the weakness of US economic data was weighing on the trans-Tasman currencies.
"There's been a lot of pressure on base metals and commodity prices in the last two weeks and I think it's finally had a flow-on effect...Certainly the aussie's running into a lot of pressure based on lower commodity prices."
Offshore, the US dollar stayed buoyant in Asia despite another fall on Wall Street, with traders showing reluctance to chase the yen and euro higher on views that a US economic slump would also bode ill for other economies.
But most traders expect the rise in the greenback to be limited following a series poor US economic data.
On the crosses at 5pm, the kiwi traded at A86.04c (A86.05c at Friday's close), 54.34 yen (55.30), 29.11 pence (29.55), 0.6734 Swiss francs (0.6847), and 0.4632 euro (0.4716).
The aussie was trading at $NZ1.1621 ($NZ1.1622).
On the money market, 90-day bills were unchanged at 5.87 per cent, the trade-weighted index was at 52.23 (53.07) and the monetary conditions index eased to minus 558 (minus 479).
On the debt market, the April 2004 bonds were at 5.49 per cent (5.48), the November 2006 bonds were at 5.95 per cent (5.93), and the November 2011 bonds were at 6.21 per cent (6.25).
- NZPA
<i>Currency:</i> Kiwi loses 2 per cent on global growth concerns
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