The New Zealand dollar dropped below 63 US cents for the first time in almost four years as investors remain nervous that the US-China trade war and a slowing domestic economy will push interest rates lower.

The kiwi fell to 62.98 US cents at 5pm in Wellington from 63.12 cents at 8am and 63.05 cents yesterday. The trade-weighted index was at 70.46 from 70.55 at 8am.

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The local currency dropped to a fresh four-year low yesterday as deteriorating expectations among businesses about their own activity stoked fears about the strength of the domestic economy. However, the lingering tensions between the US and China have weighed on risk-sensitive assets for the better part of the year and triggered a worldwide response by central bankers, including New Zealand's Reserve Bank.

"The business confidence sums it up - that really it's looking a bit weaker generally in New Zealand across the board," said Phillip Lindberg, manager of foreign exchange at OMF.

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"Potentially there's going to be further rate cuts coming out of the Reserve Bank," he said.

"There's an 85 per cent chance for one cut in November as we continue to the race to the bottom for interest rates and New Zealand is a part of it."

The Reserve Bank cut the official cash rate to a record low 1 per cent earlier this month, which governor Adrian Orr said was to pre-empt the need for further cuts later.

The two-year swap rate rose to a bid price of 0.9053 per cent from 0.8725 per cent yesterday and 10-year swaps were up at 1.1850 per cent from 1.1475 per cent. The two-year swap started the month at 1.2247 per cent and the 10-year at 1.6325 per cent.

Lindberg said the kiwi dollar could fall to the mid-62s or even 61 US cents as it comes under more pressure from investors. It's heading for a 1.6 per cent slide this week and started the month at 65.56 US cents.

The kiwi fell to 4.5034 Chinese yuan from 4.5089 yuan and fell to 67 yen from 67.24 yen. It traded at 93.72 Australian cents from 93.79 cents and was at 57 euro cents from 57.09 cents. The local currency traded at 51.69 British pence from 51.81 pence.