The New Zealand dollar ended a week which promised so much at a 2 1/2-month low, blindsided by a dismal euro and disappointing local growth numbers.
It closed one and a third US cents down on Thursday's end, at 40.41USc from 41.67c.
This week business and consumer confidence, balance of payments, and export figures primed the kiwi for a rally, but a lacklustre Australian dollar capped the topside.
The main damage yesterday, however, was done overnight in the wake of a small official interest rate cut by the US Federal Reserve.
"The main story is the weak euro," said Greenwich Financial Services director Earl White.
The euro was down a cent and a half, at 84.55USc from 86.09c, as the NZ market closed.
Mr White said following the Fed's rate cut the European Central Bank was seen as being too slow to do the same, risking recession.
"The markets are back into the game of punishing currencies which don't ease. The euro is getting punished quite aggressively.
"If the aussie and the euro continue to fall the kiwi will have a look under 40USc."
The March quarter GDP data tapped the final nail in the kiwi's coffin. People were disappointed forecasts of 0.7 per cent gain were missed by so much.
"That was the final blow," Mr White said. "The GDP data actually pushed us down against the euro and the aussie."
- NZPA
<i>Currency:</i> Kiwi trashed as euro dives
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