The New Zealand dollar ended the day back at sub-40USc levels to close near its lows at 39.52c.
Jon Clarke, of Treasury advisers Greenwich Financial Services, said it had been a fairly disappointing session for the kiwi, which failed to fire despite several pieces of positive news.
"The kiwi opened weak due to pressure mainly on the aussie," Mr Clarke said. "The Reserve Bank of Australia had intervened overnight but there appeared to be quite aggressive selling out of some US investment houses.
"It would appear [the investment houses] are trying to make a new low on the aussie - this would benefit them via the option plays they have at the moment," he said.
Just after 9 am the Australian dollar was at 51.48USc, and sank further to 51.21USc at 5 pm New Zealand time.
"There is a little bit of support for the kiwi around the 39.50USc area, and while the aussie holds above its all-time low (51.12USc) then this area may well hold. But if the aussie gets a nudge overnight the kiwi may re-test its all-time low just around the 39c area.
"Locally the data was not that negative. We had the non-resident holdings of Government securities, that was up a few per cent in October and over December. In our Treasury bond tenders and our weekly Treasury bill tenders we are also getting reasonable interest," Mr Clarke said.
- NZPA
<i>Currency:</i> Sinking $A drags kiwi down
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