The New Zealand dollar slumped to two-week lows on falling building data and negative comments about the deficit from Finance Minister Michael Cullen.
"A stronger US dollar, euro's weaker, your Aussie's weaker and then soft building data and some comments from Cullen [all] contributed to putting the skids under it," Mark Elliot, a senior dealer with ANZ Investment Bank, said .
Dr Cullen, currently in Vietnam for the Apec finance ministers' meeting, told media that the high exchange rate was risk to the New Zealand economy.
Currency dealers reported a busy day, with strong selling out of Japan and compounded by a temporary systems failure.
The kiwi fell more than half a US cent during the session, closing at US63.95c compared to US64.75c yesterday.
Key support is seen at US63.30c and resistance at US64.10c.
The kiwi has been on the backfoot as traders looked for opportunities to lock profits from the latest rally which drove it up to six-month highs on Monday.
Data showing the value of residential building work had dropped a seasonally adjusted 9.1 per cent over the June quarter also had an effect.
The kiwi ended almost flat against its Australian counterpart, closing at A84.40c from A84.49c yesterday, as weaker commodity prices put the Aussie under pressure.
It closed here at US75.78c, from US76.69c yesterday. Earlier in the week the Aussie touched a four-month high of US77.21c.
Locally, the focus has shifted to a raft of data due next week including Q2 trade figures, a Q2 manufacturing survey, and July retail sales. The Reserve Bank makes a monetary policy announcement on Thursday.
<i>Currency:</i> Various factors put skids under kiwi
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