KEY POINTS:
The New Zealand dollar hit a one-month low today, as worried investors continued to sell stocks and riskier assets such as the high-yielding currency.
By 5pm, the kiwi was at US76.20c, down from US76.86c late yesterday afternoon but above the session low of US75.63c.
Against the Australian dollar, the kiwi was little changed at A87.13c from A87.29c yesterday.
The kiwi hit a two-month low against the yen during the session, below 81 yen, and was also weaker against the euro and sterling.
The Aussie also lost ground against the US dollar, to US87.44c from US88.05c yesterday.
A sharp fall in global share prices prompted investors to unwind risky carry trades, which use the low-yielding yen to fund investment in high-yielders.
"We saw US equity markets fall heavily, so the S&P finished down 2.9 per cent ... and those concerns about global growth flowed through into Asian equities today," said BNZ currency strategist Danica Hampton.
"I think that these global concerns are here to stay for a while longer, and while the markets are hopeful that the Fed will cut (rates) aggressively at the next meeting, that probably won't change market sentiment," she said.
A 2 per cent rise in November's seasonally adjusted sales, the fastest pace of growth in nine months, failed to make an impact on the NZ dollar.
Markets were likely to remain volatile overnight, pushing the kiwi and other currencies lower, Ms Hampton said, although the kiwi was likely to find support around US75c.
The currency is a far cry from its one-month peak of US79.16c on Monday.
The US dollar held onto losses against the yen after Federal Reserve chairman Ben Bernanke told lawmakers that more interest rate cuts may be needed as the US economic outlook has worsened.
Currency rates at 5pm
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US76.20 US76.86
NZ dlr/Aust dlr A87.13c A87.29c
NZ dlr/euro 0.5206 0.5246
NZ dlr/yen 81.57 82.29
NZ dlr/stg 38.70 39.14p
NZ TWI 70.47 70.97
Australian dollar US87.44c US88.05c
Euro/US dollar 1.4639 1.4655
US dollar/yen 107.03 106.99
- NZPA