The New Zealand dollar fell as traders took yesterday's weaker-than-expected economic growth figures as further evidence the Reserve Bank won't need to raise interest rates any time soon, which may see the nation's yield premium eroded.

The kiwi dollar fell to 69.73 US cents as at 8:30am in Wellington from 69.91 cents late yesterday. The trade-weighed index fell to 75.81 from 76.07.

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The New Zealand dollar rallied early yesterday after the Federal Reserve raised the fed funds rate as expected but kept its interest rate track unchanged, signalling two more hikes this year. The kiwi pared its gains after figures showed the economy expanded just 0.4 per cent in the fourth quarter, weaker than the 0.8 per cent pace some economists had expected and below the Reserve Bank's 1 per cent forecast, as unfavourable weather crimped farm output.

"While we wouldn't want to overplay how weak the data was (amid signs of temporary weather distortions), they do nonetheless underscore the RBNZ's view that time is on its side, especially given the myriad of global uncertainties and recent moves higher in retail interest rates, which is a de facto tightening," said David Croy, senior rates strategist at ANZ Bank New Zealand. "None of that should be enough to shoot the kiwi down, but strong growth was one of the key attractions, and things aren't quite as glowing as we thought on that score."

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More information about the pace of growth is due out this morning, with the BusinessNZ/BNZ PMI survey of manufacturing for February, while the ANZ consumer confidence survey for March is due out at 1pm NZ time.

The kiwi fell to 56.44 British pence from 56.99 pence after the Bank of England left interest rates unchanged but some policymakers saw scope for a hike with only a moderate pickup in inflation or economic growth. It fell to 64.77 euro cents from 65.19 cents after Dutch election results showed there wasn't the feared shift to the right in the form of Geert Wilders' Freedom Party, which won only 13 per cent of the vote.

The kiwi fell to 90.92 Australian cents from 91.03 cents, declined to 4.8106 yuan from 4.8206 yuan and dropped to 78.96 yen from 79.28 yen.