The New Zealand dollar dropped sharply against the US dollar today and dealers said there was a good prospect of it falling below US60 within weeks.
The kiwi ended at US62.70c compared with its US63.26c close yesterday. Against the Australian dollar, it ended at A84.02c from A84.40c.
John Body, head of markets for ANZ Bank, said the kiwi encountered offshore liquidation overnight and the local market spent the day trying to absorb the offshore supply.
"The kiwi's had a reasonable period of retracement from its weakness and I think we are on the cusp of another round of selling."
"We're quite negative on it at the moment. We are on the next leg down, which would take us below US60c."
He said it was a combination of the economy, monetary supply and property markets slowing.
"Eventually, the Reserve Bank will be forced into an easing cycle."
No one expects the Reserve Bank to signal the start of an easing policy when it releases its quarterly Monetary Policy Statement on Thursday. But Mr Body said "currency markets never wait for the Reserve Bank to cut rates before they sell the currency".
The kiwi fell to 48.96 euros from 49.50c yesterday and is now at its lowest level for three-and-a-half years.
The trade weighted index ended on 62.58 from 63.10 while the Australian dollar ended on US74.63c from US74.93c here yesterday.
The US dollar was range bound as investors hunkered down ahead of a closely watched jobless report that could help the Federal Reserve decide whether to bump up interest rates again later this month.
The dollar ended Thursday trade little changed after its gains on hawkish Fed minutes earlier in the week were erased by data showed a cooling in the growth of US factory activity.
The market is betting the Fed will raise US overnight rates for a 17th straight meeting at the end of June. The key rate now stands at 5 per cent.
The decision is expected to depend on continued signs of buoyancy in the US economy, thus the market's focus on the monthly employment figures.
"It's difficult to expect any big moves in currencies until the jobs data," said Tohru Sasaki, chief forex strategist at JPMorgan Chase Bank in Tokyo.
"The risk for the dollar is on the downside if the data is weak," he added.
Rates:
5pm today 5pm Thursday
NZ dlr US62.70c US63.26c
NZ dlr/Aust dlr A84.02c A84.40c
NZ dlr/euro 0.48.96 0.4950
NZ dlr/yen 70.65 71.20
NZ dlr/stg 33.62 33.89
NZ TWI 62.58 63.10
Australian dollar US74.63c US74.93c
Euro/US dollar US1.2815 US1.2776
US dollar/yen 112.64 112.58
- NZPA
<i>Currency:</i> NZ dollar sinks sharply
AdvertisementAdvertise with NZME.