The New Zealand dollar may fall this week, extending its decline as an unexpected drop in consumer confidence in the U.S. drags down investor appetite for higher-yielding, or riskier, assets.

Four of six economists and strategists in a BusinessWire survey predict the kiwi will slide towards 66 U.S. cents this week after a report on Friday showed a 4.2 per cent decline in the Reuters/Michigan preliminary index of consumer sentiment for August. One says the currency may push back above 68 cents while another expects it to trade in a range this week.

Consumer confidence took a knock in the U.S., raising concerns the world's largest economy may not enjoy as fast or as strong a recovery as earlier anticipated. The Standard & Poor's 500 index slipped 0.6 per cent last week, its first decline in five weeks, while the Shanghai SE Composite Index sank 6.5 per cent, the biggest weekly decline this year, on fears the Chinese economic recovery may not meet the market's expectations.

"People are still confident a global recovery will happen, it's just a question of whether or not it will be as strong or as quick as anticipated," said Danica Hampton, currency strategist at Bank of New Zealand. "The markets got a little over-excited, and there are now concerns the U.S. consumer won't be able to pull the economy out of recession."

Hampton predicts the currency will push down to around 66 U.S. cents this week as risk aversion grabs hold of investors and encourages them to eschew higher yields.

The kiwi recently traded at 67.43 cents after it reached an 11-month high above 68.80 cents from 68.02 cents on Friday in New York.

Khoon Goh, senior markets economist at ANZ National Bank, said the drop-off in consumer sentiment should pull back stocks on Wall Street this week amid renewed concerns about the global recovery. With a light flow of data, currency markets will be taking their cues from Asian and global equity movements.

"Risk has been taken off the table somewhat," he said. The kiwi currency will find support around 66.30 U.S. cents this week, he added.

Still, declines in U.S. housing and manufacturing probably eased this month, according to a Bloomberg survey. Jonathan Cavenagh, currency strategist at Westpac Banking Corp. in Sydney, predicts this will help revive investors' appetites for risk after the weak consumer confidence data last week.

If the housing and manufacturing data out this week prop up "signs the U.S. economic recovery is still going, equity markets will push higher and risk appetites will flow into currency markets," he said.

He predicts the kiwi will trade between 66.50 U.S. cents and 68 cents this week, pushing to the top of the range later in the week.

Central bank heads will meet in Wyoming this week in a conference hosted by the Federal Reserve and are expected to discuss ways to unwind the extraordinary monetary policy measures taken to combat the worst global recession since World War II. Fed chairman Ben Bernanke will give a speech to the conference on Thursday in the U.S. and traders are expected to pay attention to what he says.

Four of six strategists predict the kiwi will decline on a trade-weighted basis this week as investors return to the relative safety of the yen and U.S. dollar. One predicts it will trade in a range, while the other expects it to push higher.

The kiwi dollar fell to 62.17 on the trade-weighted index, or TWI, a measure of the currency versus the yen, euro, greenback, Australian dollar and pound, from 63.21 on Friday in New York.

Goh said the kiwi has remained remarkably high against the Australian dollar and should ease this week as traders catch up to the fact that Australia is better placed to come out of the global downturn. The kiwi rose to 81.20 Australian cents from 80.80 cents on Friday in New York.

The Zew survey of business confidence in Germany may show a more benign picture emerging in Europe, which would support both the euro and the kiwi dollar.

Eurozone second-quarter gross domestic product beat expectations last week, shrinking 0.1 per cent in the period, after the German and French economies managed to escape falling into recession. The kiwi slipped to 47.52 euro cents from 47.64 cents on Friday in New York.

The Bank of England will release the minutes from its last meeting where it held interest rates at a record low 0.1%, but expanded its quantitative easing programme. The New Zealand dollar dropped to 40.91 pence from 41.11 pence on Friday in New York.

The Japanese economy climbed out of recession in the second quarter this year, with its GDP growing 0.9 per cent as exports rebounded and government stimulus boosted consumer spending and public investment. Still, the market predicted a quarterly rise of 1 per cent. The kiwi slipped to 63.75 from 64.67 yen on Friday in New York.

On the data radar this week is the producer price index on Wednesday, and migration figures on Friday.