KEY POINTS:
The New Zealand dollar continued its descent against major trading partners as the US dollar remained weak and investors shied away from risk.
The kiwi closed at US79.44c, from US81.52c on Friday, losing about half a US cent during the day on soft equity markets and lingering credit concerns.
It continued to underperform against the Australian dollar, closing at A85.36c from A86.12c on Friday night.
The kiwi also softened against a strengthening yen to 81.90 yen (from 85.35 on Friday), and to 0.5226 euro (0.5370 euro)
The kiwi has steadily lost ground after hitting a 23-year post-float high of US82.15c on Wednesday after dour economic data in the US sent Wall St down more than 2 per cent on Friday night.
The greenback also slid to record lows against the euro, raising the risk of a sharp interest rate cut next month.
ANZ Investment Bank's chief forex dealer Murray Hindley said the kiwi started out stronger at around US79.80c but export interest tapered off and was replaced with momentum selling out of the US.
Renewed risk aversion was "probably why we've seen a clean-out on some of the yield plays, particularly with kiwi-yen and aussie-yen being considerably weaker".
He expected the kiwi would test support around US70.20c and resistance of US79.80c overnight.
The trade weighted index dropped to 71.42 from 73.24 on Friday.
Currency rates:
NZ dlr/US dlr US79.44c US81.52c
NZ dlr/Aust dlr A85.36c A86.12c
NZ dlr/euro 0.5226 0.5370
NZ dlr/yen 81.90 85.35
NZ dlr/stg 40.05p 40.99p
NZ TWI 71.42 73.24
Australian dollar US93.07 US94.61
Euro/US dollar 1.5203 1.5176
US dollar/yen 103.09 104.72
- NZPA
