NZ dollar extends decline on Federal Reserve's plans for faster US rate hikes

The kiwi rose to 57.12 British pence, the highest since mid-March.

The New Zealand dollar extended its decline after this week's Federal Reserve decision to hike interest rates and project further increases in 2017.

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The kiwi dollar dropped to 70.36 US cents as at 8am in Wellington from 71 cents late yesterday. The trade-weighted index fell to 78.13 from 78.55.

The Fed raised the target federal funds rate by 25 basis points to between 0.50 per cent and 0.75 per cent, as expected, but also signalled three further increases in 2017 when the market was expecting two.

The US dollar index rose to 103.512, the highest since December 2002 after the Fed statement drove Treasury yields higher.

The Fed's "less dovish projections immediately catapulted the USD higher, yesterday morning. The upward momentum was maintained last night. All of its peers suffered," said Kymberly Martin, senior market strategist at Bank of New Zealand, in a note.

The kiwi fell to 95.51 Australian cents from 95.70 cents following the release yesterday of Australian labour market data which showed employment rose by 39,100 in November, more than twice the 17,500 expected by economists.

The kiwi fell to 4.8830 yuan from 4.9283 yuan late yesterday. It slipped to 67.46 euro cents from 67.60 cents, fell to 56.54 British pence from 56.67 pence and declined to 82.96 yen from 83.39 yen.