The New Zealand dollar dipped below 43USc, after greenback supporters took heart from predictions of a recovery in the giant US economy later in the year.
"There has been continued offshore selling and that has been the main driver pushing the kiwi lower," Bank of New Zealand foreign exchange manager Mike Symonds said.
"It is the same old scenario really - a stronger US dollar theme and the view that the US economy is going to grow relatively strongly over the course of the next three quarters."
Optimistic conference board forecasts and comments by the Federal Reserve chairman, Alan Greenspan, on Tuesday night - where he spoke of a US economic recovery later in the year - had served to boost the US dollar, he said.
At 5 pm, the kiwi was at 42.76USc from 43.34USc at Wednesday's close.
Mr Symonds said he still held hope for a stronger kiwi in the longer term.
"I still think the picture for the US economy over the course of the remainder of this year looks very uncertain.
"I still feel that we are going to go through a period of weaker growth in the US and I am optimistic for the kiwi over the course of the next three to six months.
"The question is where we see this retrace in the currency is going to end."
The danger area technically for the kiwi was holding above the 42.25USc level, Mr Symonds said.
"That area is a 50 per cent retrace of the whole up move that we have seen over the last year and earlier this year.
"I think from a technical point of view that low 42USc area is going to be relatively important."
- NZPA
<i>Currency:</i> Kiwi slips as US recession fears fade
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