The New Zealand dollar joined the sinking tide against a stronger United States dollar today as concerns grew globally about the state of banks in Europe.
By 5pm, the kiwi had fallen to US51.24c from US51.93c late yesterday afternoon, and looked likely to head lower overnight.
"We thoughtit was obviously going to be quite quiet just after the US holiday, but we've see a stronger (US) dollar across the board led by a move in euro," said Jake Soanes, Westpac head of financial market sales.
"Basically a lot of concern around the banking structure in Europe is the main driver behind that."
The euro fell to a more than two-month low against the US dollar and slid against the yen after credit rating agency Moody's said the recession in emerging Europe was likely to be more severe than elsewhere.
Pressure was expected to increase on financial strength ratings of local banks and their Western parents, fuelling simmering investor worries about the region.
"We've moved on from bad news out of the US and now (to) increasingly bad news out of Europe," Mr Soanes said.
Overnight, the kiwi would continue to keep its negative tone and probably drop below US51c.
"I think that fits with our medium-term view that kiwi is going to continue to trade a lot lower, into the US40s going into later on mid-year and even towards the end of the year," he said.
The kiwi was little changed against the Aussie, at A79.57c from A79.60c late yesterday. The currency eased to 0.4053 euro from 0.4066, to 47.45 yen from 47.60 yesterday, and to British 36.07p from 36.50p.
