The New Zealand dollar remained below US70c in trading today, with dealers suggesting the local currency would likely trade between US67c and US72c over the coming months, well below the levels achieved in 2016.
The kiwi was trading at US69.57c at 5pm, down slightly from US69.60c at 8 am and US69.58c on Friday in New York.
US non-farm payrolls published on Friday showed average wages rising at their fastest pace since 2010, adding to a theme of quick rate hikes by the US Federal Reserve, strengthing the greenback and sending the local currency down below US70c again.
It had risen to a three-week high in thin trading during the first days of the New Year. The trade-weighted index dropped to 77.31 from 77.61 on Friday.
Michael Johnston, senior trader at HiFX in Auckland said the decline in the value of the kiwi would be driven by the continued strength of the US dollar.
"In the medium-term, we believe the US dollar will show form and the kiwi/US cross will trade in an at least a 5 cent range, struggling to get above 72 cents, dropping down to 66/67 cents. If dairy prices started to soften more, and you had to start to factor in a Reserve Bank of NZ rate cut, then you could see below 65 cents."
ManufacturingNZ and ExportNZ said earlier today that they expected to benefit from a weaker currency this year, but warned of concerns over trade protectionism policies that have been espoused by the incoming US President, Donald Trump.
The kiwi posted its 2016 peak in September, reaching US74.49c. It spent most of the second half of the year between US70c and US74c.
Trading was quiet, partly due to a public holiday in Japan. However, the NZ dollar did move significantly lower against the Australian dollar, falling to A95.17c from A95.62c on Friday.
Johnston said that reflected a rise in the value of the Australian dollar against the greenback, and he expected the kiwi to decline further against its transtasman counterpart, although it was unlikely to be a dramatic drop.
The local currency rose against the British pound to 56.82p from 56.59p at the end of last week. It dipped against the euro, trading at 66.09 euro cents, from 66.24 euro cents on Friday. It rose against the Japanese yen, buying 81.68 yen from 81.20 yen. It fell against the Chinese yuan, buying 4.8231 yuan compared to 4.8453 yuan before the weekend.
New Zealand two-year swap rate rose 2 basis points to 2.38 per cent, while the 10-year swap rate rose 6 basis points to 3.43 per cent.