The New Zealand dollar crashed threequarters of a US cent yesterday to a new all-time low of 42.08USc, before closing slightly better at 42.20c.
"It's bearish, no buyers, the market was weak and long," a currency dealer said.
"Some fresh kiwi-aussie selling came through and it broke the back."
Last week the local dollar set a new record low of 42.35USc. This week it appeared to consolidate, reaching a closing high of 43.63c. Despite those gains the underlying story remained the same, and dealers all week cautioned against believing the kiwi was safe.
Reasons given for bearishness remain Government policy, a massive current account deficit, and worries over growth.
"It's a question of why would you want to buy kiwi, why would investors want kiwi?" Bank of New Zealand chief currency dealer Mike Symonds said.
Disturbingly, the kiwi's fall comes on a day when the Australian dollar, which usually sets the trend, actually rallied. It closed in New Zealand at US57.51c (57.40c on Thursday).
Plumbing the depths, the kiwi was buying 73.47Ac - still above the 1991 low of 70Ac - down from 75.07c on Thursday.
The trade weighted index also dropped to a record low - 48.00. It closed slightly firmer, at 48.14 (48.94).
In contrast, longer bonds rallied.
- NZPA
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