The kiwi was little changed at 84.15 US cents at 8am in Wellington from 84.13 cents at 5pm yesterday.
The New Zealand dollar fell after Reserve Bank governor Graeme Wheeler said he may intervene in currency markets if the kiwi stays strong in the face of falling dairy prices.
The local currency dropped to 86.89 US cents from 87.41 cents immediate before the speech, 87.47 cents at 8am and
86.91 cents yesterday. The trade-weighted index fell to 80.43 from a post-float high 81.21 in Northern Hemisphere trading and 80.72 yesterday.
RBNZ's Wheeler told a dairy conference in Hamilton the currency was still overvalued, and "it would become more opportune for the Reserve Bank to intervene in the currency market to sell New Zealand dollars" if the kiwi remains high while commodity prices fall.
The speech came after dairy prices at Fonterra Cooperative Group's GlobalDairyTrade auction fell for a sixth time, fuelling speculation the world's biggest dairy exporter will reduce its forecast payout to farmers.
"We suspect it was a reminder from the RBNZ that there are currency concerns in the economy and that they do have options," said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland. "It should take the edge off it (the kiwi dollar's strength) a little bit - you've got to respect the central bank."
