The New Zealand dollar is headed for a 2.3 per cent weekly fall against the US dollar after strong data there and hawkish comments from the chair of the Federal Reserve increased speculation that US rates will keep rising.
The kiwi traded at 64.65 US cents at 5pm versus 64.78 cents at 8am in Wellington and 64.97 cents yesterday. It was at 66.16 last Friday in New York and is hovering around lows not seen since February 2016. The trade-weighted index dropped to 70.81 from 71.11.
The benchmark 10-year US Treasury briefly pushed above 3.23 per cent overnight, its highest level since 2011. It is now hovering around 3.19 per cent after strong data upped the chances of more US rate increases.
Earlier in the week, the greenback also got a solid lift when Fed Chair Jerome Powell said interest rates "may go past neutral, but we're a long way from neutral at this point, probably," according to CNBC.
"After the Fed endorsed the robust US economy, the market seems to have given up trying to fight against it. I think it's been a bit of a reality check week that the US economic strength isn't going to go away," said Martin Rudings, senior dealer foreign exchange at OMF.
Markets are now waiting for US jobs data, with non-farm payrolls tonight likely to show the US added 181,000 jobs last month.
Rudings said the kiwi could dip as low as 63.50 US cents in the near term, in particular if the payrolls number is stronger than expected.
The kiwi dropped to 49.68 British pence from 50.20 pence yesterday and declined to 56.17 euro cents from 56.58 cents.
New Zealand's dollar traded at 91.51 Australian cents from 91.59 cents yesterday and fell to 4.4395 Chinese yuan from 4.4601 yuan. It dropped to 73.62 yen from 74.18 yen.
New Zealand's two-year swap rate was unchanged at 2 per cent, while the 10-year swap rose 1 basis point to 2.89 per cent.