The New Zealand dollar extended its decline amid ongoing uncertainty at the economic impact of the coronavirus crisis and growing mistrust of what Chinese officials say about the disease's spread.

The kiwi was trading at 63.11 US cents at 5pm in Wellington, off the day's low at 63.06 cents but down from 63.52 cents late yesterday and 64.30 cents a week ago. The trade-weighted index was at 70.71 points from 71.04.

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"It seems comments from China's Ministry of Commerce confirming the negative economic impact of covid-19 have contributed to NZ dollar/US dollar weakness this afternoon," said Hamish Pepper, a fixed-income and currency strategist at Harbour Asset Management.

Earlier, Reserve Bank governor Adrian Orr gave a speech in which he said he's "in no rush to go lower" on the official cash rate, which caused the domestic currency to spike to the day's high at 63.41 US cents but that brief spurt of optimism was quickly overwhelmed by the news from China.


Mark Johnson, an adviser at OMF, said people are growing more cynical about what Chinese officials are saying.

"A couple of things are important – trust and communication," he said. When things happen, such as China changing its methodology in deciding who's infected, as they did earlier this week, "you start to wonder about the integrity."

An example of that distrust came today with China's government reporting reducing numbers of new infections and assuring the world the numbers will continue to fall.

But at the same time, the city of Daegu in South Korea, more than 1,400 kilometres from the Chinese city of Wuhan where the virus was first detected, reported 35 new cases of the coronavirus. Officials in Korea's fourth-largest city warned citizens to remain indoors and to wear masks even inside their homes.

The number of cases reported to date has grown to 76,738 with 2,247 people having died. Encouragingly, another 18,561 have recovered.

Johnson noted the Australian dollar is also under pressure, falling below 66 US cents to as low as 65.92 cents briefly this afternoon.

"I look at the Australian dollar as being the risk barometer and a proxy for China," he said.

The New Zealand dollar was at 95.55 Australian cents from 95.71 cents at 5pm yesterday. It was at 48.94 British pence from 49.21, at 58.48 euro cents from 58.82, at 70.69 yen from 70.75 and at 4.4348 Chinese yuan from 4.4628.


The two-year swap rate fell to a bid price of 1.0327 per cent from 1.04 per cent yesterday; the 10-year swap rate fell to 1.3675 per cent from 1.3850 per cent.