The New Zealand dollar was undercut today by a stronger United States counterpart, and could head below US54c this week.
By 5pm the kiwi was at US54.25c, well down from US54.68c at Friday's close, and the aussie weakened to US58.68c (US58.80c).
Bank of New Zealand currency strategist Stu Ritson said the US dollar began the week on the front foot, and the kiwi was correspondingly softer.
He picked the kiwi to trade between US54.00c and US54.45c, with a greater likelihood of falls than rises.
"We think the risks are skewed to the down-side, and certainly a move towards US53.50c can't be discounted during the course of the week," Mr Ritson said.
"The local calendar remains bare so the New Zealand dollar will remain captive to the on-going fluctuations of the big (US) dollar."
On the data front, external migration figures for December are due on Tuesday and the Quarterly Employment Survey on Wednesday, although neither are expected to have a big influence on the kiwi.
The Chinese New Year meant many Asian markets, including Hong Kong and Singapore, were closed, although volume was steady for a Monday.
In Tokyo today, the dollar spiked more than one yen after a Japanese news agency said Prime Minister Junichiro Koizumi was considering appointing a supporter of inflation targeting as Bank of Japan governor.
But Mr Koizumi denied the report, saying the decision was still a "blank sheet of paper".
Underpinning the greenback was data released in the United States on Friday showing the regional Chicago purchasing managers index rose more than expected to 56.0 in January, well above the consensus estimate of 52.6. A reading above 50 indicates an expansion in activity.
The kiwi put on a mixed show against its main trading partners this morning, and at 5pm was buying A92.46c (A92.84c at Friday's close), 0.5045 euro (0.5045), 65.11 yen (64.94 yen), 33.00 pence (33.00), and 0.7392 Swiss francs (0.7404).
The Australian dollar was buying $NZ1.0815 ($NZ1.0773).
New Zealand's trade-weighted index fell to 59.91 (60.06), 90-day bank bills were at 5.84 per cent (5.83), and the monetary conditions index was at plus 125 (138).
On the debt market, the April 2004 government bonds were at 5.52 per cent (5.49), the November 2006s were at 5.64 per cent (5.61), the November 2011s were at 5.98 per cent (5.96), and the April 2013s were unchanged at 5.99 per cent.
- NZPA
<i>Currency:</i> Kiwi slips, faces fall below US54c
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