The New Zealand dollar slipped almost three-quarters of a US cent as its Australian counterpart crashed to an all-time low.
The kiwi finished at 39.67USc from 40.36c on Monday.
The aussie closed locally at 51.54USc from 52.33c but went on to new lows around 51.10c.
"The kiwi has been quite orderly in its decline," a currency dealer said, noting it had weakened proportionally less than its Australian cousin.
The dealer said the aussie suffered because the market was caught long as a couple of American and Japanese sellers entered.
He believed the sell orders were made because the investors wanted to move their cash into another country's assets. The aussie's fundamentals had not shifted - indeed the country yesterday recorded its first trade surplus in almost three years, on the back of the Sydney Olympics.
The dealer said people were obviously now more cautious about the kiwi's upside and the risk to the downside had grown. If the euro - the other main leader for the kiwi - maintained its stability that could see the aussie stabilise and put the local unit back on an even keel.
- NZPA
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