The New Zealand dollar dropped more than a US cent yesterday after Danes voted against adopting the ailing euro, which is cuurently the primary driver for the kiwi.
The local dollar was punished further when June quarter gross domestic product data showed a 0.7 per cent contraction compared with expectations of around 0.5 per cent.
"Suddenly it looks ugly again. We could go quite a bit lower, I feel," a currency dealer said.
The kiwi finished at 40.55USc from 41.65USc on Thursday in thin trade.
Last week it hit a record low of 40.15USc, recovering this week with hopes of making 42USc as intervention protected the euro.
The Australian dollar suffered less, but was taken down by the euro and terms of trade numbers, ending at 54.40USc from 54.98USc.
The dealer could find nothing positive to say about the kiwi, which has had ho-hum trade data and grim consumer and business confidence surveys added to its woes this week.
Its downside was protected only by the prospect of further G7 euro intervention, but the dealer said that was merely a short term support.
He could not remember an intervention since the mid-1980s that had worked long term.
Another dealer said looking for a level where investors would come back in was like saying people would buy Ladas if they were cheap enough.
- NZPA
<i>Currency:</i> Danish vote puts kiwi to flight
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