The New Zealand dollar's retreat from its US65.95c peak two weeks ago picked up pace yesterday.
The kiwi lost the best part of a cent against the greenback to reach US62.74c at its 5pm local close.
Once again it was mostly a US dollar story with the greenback benefiting from
some risk aversion as the Dow Jones and the Standard & Poor's 500 both dropped by more than 2 per cent.
New Zealand's benchmark index, the NZX-50, fell 1.38 per cent yesterday.
Westpac market strategist Imre Speizer said markets had shown little love for the US unit for the past three months but a modicum of affection was returning.
"People have been recently going back and buying US treasuries. Central banks have been making more noises that they love US treasuries rather than making noises that they don't and that's caused sentiment to pick up."
BNZ currency strategist Danica Hampton observed that comments from Russian Finance Minister Alexei Kudrin had helped to support the US dollar.
Kudrin said representatives from Brazil, Russia, India and China who will meet this week would not focus on the possibility of replacing the US dollar as the world's main reserve currency in the near future. Meanwhile, news out of Europe has been relatively gloomy which has weakened the euro and strengthened the greenback.
Big Swiss bank UBS was warned over its credit rating, there was yet more talk of a less rosy growth outlook from the IMF, and the European Central Bank suggested more big write-offs looming for the banking sector there.
Westpac believes the kiwi will continue to soften against the resurgent greenback and is picking it will hit US62c this week and US59.50c further out. "There is nothing datawise in New Zealand this week, so offshore events will dominate the market," Speizer said.
