The New Zealand dollar was knocked off its high perch by political turbulence in Thailand that saw all Asian currencies sold.
From a level above US66.50c, the kiwi dropped during the next two hours to US65.80c before partly recovering to close at US66.02c.
A similar drop, although not as sharp, was seen against the Australian currency, with the NZ dollar falling from above A88.05c to near A87.52c.
Traders said the Thai coup caused the usual flight to quality but was really just an excuse for traders to take profits. There is also wariness ahead of tomorrow's current account figures.
The trade weighted index ended on 66.31 from 66.60.
BNZ currency strategist Danica Hampton said the NZ dollar was sent lower by a combination of factors, including the news of political unrest in Thailand.
While that would not be a major driver of the NZ dollar usually, it was not a positive for any Asia-Pacific currencies, and was an "excuse", she said.
It coincided more generally with profit taking on long kiwi-aussie and long kiwi-yen positions ahead of tomorrow's NZ current account data.
"People are just wary that the Q2 current account deficit is likely to serve as another reminder about the rebalancing the New Zealand economy needs between the... external sector and the internal," Ms Hampton said.
BNZ said the kiwi was likely to have a downside bias over the next couple of days.
Trading in the majors saw the yen climb against the euro and the US dollar after a European official said markets had yet to digest policymakers' weekend remarks calling for the Japanese currency to rise versus the euro.
The yen had initially shrugged off seemingly co-ordinated comments by Japanese Finance Minister Sadakazu Tanigaki and European officials that seemed to back a strong yen by saying the currency should reflect Japan's solid economic recovery.
But investors pricked up their ears after an unnamed European official said that markets may need time to digest the comments, which came after finance ministers from the Group of Seven powers met over the weekend.
"The market realises now that maybe that's not the correct view and the yen crosses are being sold," said Luke Waddington, head of forex trading in Tokyo at Royal Bank of Scotland.
The US dollar was also dented after soft US housing starts and core producer price data on Tuesday bolstered expectations the Federal Reserve will keep rates at 5.25 per cent for a second straight time at a policy meeting on Wednesday.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US66.02c US66.27c
NZ dlr/Aust dlr A87.52c A87.82c
NZ dlr/euro 0.5201 0.5215
NZ dlr/yen 77.42 78.12
NZ dlr/stg 35.01p 35.22p
NZ TWI 66.31 66.60
Australian dollar US75.38c US75.53c
Euro/US dollar 1.2686 1.2710
US dollar/yen 117.27 117.89
- NZPA
<i>Currency:</i> Thai unrest knocks kiwi off perch
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