The New Zealand dollar had a volatile session today but closed sharply lower thanks to a rebounding US dollar.
At 5pm, the kiwi was fetching US68.37c (from US69.83c at the same time on Friday last week).
The Australian dollar was at US77.25c, more than 1.5 cents shy of its US78.92c close lastweek.
Dealers said the kiwi's slide was not due to comments by Finance Minister Michael Cullen on Friday, when he hinted at intervention by the Reserve Bank of New Zealand to curb the kiwi.
The greenback made gains against all currencies after inflation data came out on Friday above expectations, pointing to a hike in US interest rates.
Then Japan raised its security alert to the highest level, pushing the US dollar up further.
"It's just US dollar strength," said Westpac chief dealer in New Zealand Basil Payn.
"There's been a lot of taking back of short US dollar positions across the board."
He said there had been chaotic trading on Saturday morning New Zealand time when the kiwi, Australian dollar and euro were all sold aggressively.
The kiwi was already on a downward run during Friday's local session after Dr Cullen's attempt to talk the currency lower, known in the forex industry as "jawboning".
The greenback was buying 108.81 yen (107.32), while the euro was more than US2c weaker at US1.2509 compared with its US$1.2742 close on Friday.
At 5pm the kiwi was buying A88.52c (A88.46c), 0.5466 euro (0.5471), 74.37 yen (74.94), 36.82 British pence (36.80), and 0.8621 Swiss francs (0.8641).
The trade-weighted index fell to 67.78 (68.40), while the monetary conditions index was at plus 719 (763).
The 90-day bank bill yields rose to 5.62 per cent (5.60). In the bond market, bond yields rose along with US treasuries in response to the higher US inflation.
The February 2006 yields were at 5.61 per cent (5.53), July 2009 bonds at 5.85 per cent (5.75), and the April 2013s at 6.00 per cent from 5.91 per cent.
