The New Zealand dollar tumbled after Federal Reserve vice chairman Stanley Fischer indicated September was still a possibility for a rate hike, although dependent on upcoming economic data.

The kiwi traded at 72.26 US cents at 8 am in Wellington from 73.26 cents in New York on Friday before Fischer and his boss, Fed chairwoman Janet Yellen spoke. The trade-weighted index fell to 76.94 from 77.54.

Yellen's speech at the Jackson Hole central bankers retreat was the most anticipated event of the past week but after an initial flurry on her comments that the case for an increase in the federal funds rate "has strengthened in recent months" the market deemed the overall intent of her speech was still relatively dovish, with no clear guidance on timing.

By contrast, the market reacted strongly to comments Fischer made to CNBC that Yellen's view was consistent with two hikes this year, depending on how economic data plays out.


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"Markets were kicked into life following Fed Chair Yellen's speech, but it proved to be Vice-Chair Fischer's subsequent comments that resulted in a sustained market reaction, namely a stronger USD," said Jason Wong, a strategist at Bank fo New Zealand, in a note.

"The outlook for US monetary policy remains the key driver of the NZD and an assumed Fed hike later in the year, most probably December, is required to get the currency back down towards the 0.70 mark."

The views of Fed officials will have heightened interest in US jobs data due on Friday. Friday's Labor Department report is expected to show that US employers added about 180,000 jobs in August, while the unemployment rate fell to a three-month low of 4.8 percent, and worker pay rose, according to a Bloomberg survey.

The kiwi fell to 95.49 Australian cents from 95.60 cents on Friday and fell to 4.8157 yuan from 4.8856 yuan. It declined to 64.57 euro cents from 64.87 cents and fell to 55.03 British pence from 55.48 pence. The kiwi slipped to 73.62 yen from 73.67 yen.