The New Zealand dollar saw its biggest one-day fall since November as the greenback strengthened sharply after a speech by the chair of the US Federal Reserve Janet Yellen, in which she said the world's largest economy was getting to the stage at which it could operate without the emergency support introduced since the global financial crisis in 2008.

The local currency fell to US71.38c at 5pm today, from US71.64c at 8 am and US72.04c yesterday. A peak to trough loss of 1.3 per cent today was the biggest fall in percentage terms since November 9, Reuters reported. The trade-weighted index fell to 78.31 from 78.72.

The Federal Reserve slashed interest rates to near zero and introduced a policy of quantitative easing in response to the GFC, but has slowly been looking to wean the economy off the stimulus it introduced. In December last year, the Fed raised rates for the second time since the crisis, to a range of 0.5 to 0.75 per cent.

Sheldon Slabbert, a sales trader at CMC Markets in Auckland, said the Federal Reserve was remaining quite hawkish in its attitude to interest rates.

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"Janet Yellen talked this morning, we're still looking at probably two to three interest hikes, but I'm a little unconvinced at this point, four were promised last year, we only got one," he said.

He added that markets were currently volatile, albeit within an established range of between US68c and US74c.

"The market is also now realising we are heading into an uncertain time now," he said. "The US dollar was somewhat oversold in the short-term, we're seeing a rebalancing on the kiwi."

The kiwi had soared against the US dollar on Tuesday as traders in America sold down the greenback on comments from President Trump that the world's reserve currency had got "too strong". Those gains were almost all unwound on Wednesday.

On a day in which the local currency was down against all the major currencies, it rose to 81.78 yen from 81.42 yen this time yesterday and dropped to A94.92c from A95.36c.

The kiwi continued to drop against the British pound, falling to 58.13p from 58.33p late yesterday. Against the euro, it fell to 67.11 euro cents from 67.32c.

It was down against the Chinese Yuan, dropping to 4.8940 yuan from 4.9391 yuan.

New Zealand's two-year swap rate rose 3 basis points to 2.38 per cent, while 10-year swaps rose 7 basis points to 3.41 per cent.