The New Zealand dollar extended its decline in local trading as investors rethought their expectations for US interest rates after minutes from the Federal Reserve's last monetary policy review showed some members want to stop printing money as early as this year.
The kiwi fell to 82.32USc at 5pm in Wellington from 82.89USc at 8am and 83.21USc yesterday. The trade-weighted index declined to 74.32 from 74.75 yesterday.
Investors sold off equities around the globe after the Federal Open Market Committee minutes showed some officials "thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013."
The kiwi dollar was one of the best performing currencies last year as efforts by central banks to prop up ailing economies through printing new money flooded markets and prompted investors to seek out countries that offering positive real interest rates.
The idea that US interest rates would stay lower for longer "was pretty well priced in, and it's starting to get questioned," says Mike Jones, currency strategist at Bank of New Zealand in Wellington. "There's probably a bit more downside for the kiwi, Aussie and euro."
Mr Jones says the currency will probably find buyers all the way down to 80USc as exporters look for cheaper entries for their hedging programmes.
The publication of the Fed's acknowledgment that it can't keep printing money forever comes ahead US non-farm payrolls figures, which are expected to show the unemployment rate stayed at a four-year low 7.7%, according to a Bloomberg survey of economists.
The US central bank is putting more emphasis on the labour market, saying it will keep the benchmark interest rate near zero until the jobless rate comes below 6.5% and two-year-ahead inflation projections stay below 2.5%.
The New Zealand dollar fell to ¥72.24 from ¥72.58 yesterday and declined to 78.90A from 79.36Ac.
It decreased to €0.6319 from €0.6333 and was little changed at 51.23p from 51.28p yesterday.