The New Zealand dollar fell more than a US cent overnight after the International Monetary Fund indicated that the global economic recovery is weak and uneven.
Bank of New Zealand foreign exchange strategist Raiko Shareef said the Kiwi was hit by a wave of negative sentiment, but was little changed for most of the day.
"The casualties really were where you'd expect them to be in terms of risk aversion, with investors fairly cautious. The US dollar gained overnight and the Japanese yen and Swiss franc were among the better performers; the Aussie and the Kiwi were amongst the worst. So it's pretty much par for the course when investors are selling risk," he said.
"In the broader scheme of things, it's not too big a move for the New Zealand dollar - we're still pretty much smack bang in the middle of the range that we've had for the past couple of weeks.
"We're still finding our feet in this 77 to 80-cent space, and there's not really much that looks to challenge it at the moment, so it looks like it might be a quiet end to the week."
At 5.20pm today, the New Zealand dollar was trading at 78.64 US cents, 89.63 Australian cents, 48.78 British pence, 0.6192 euro, 84.77 yen and 4.82 renminbi.
'Rough day' for investors
The New Zealand sharemarket fell just over three-quarters of a percent, with the benchmark Top 50 Index was down 41 points to 5225 at the close of trade.
The head of wealth research at Craigs Investment Partners, Mark Lister, said New Zealand has performed better than most other markets.
"A sea of red on the screen today. We obviously had a very rough night from the US markets with most of the indicies down around 2 percent, which is the biggest fall that we've seen in some time. The Asian markets are down across the board.
"The New Zealand market, as it sometimes and often does, is holding a little better than some of the others. Most stocks are off; Xero's one of the weaker movers, it seems to be feeling the brunt of the selloff more than others.
"There are a few bright spots - a couple of the electricity companies are holding up well and they're actually in positive territory. Maybe that's people looking for good yielders and good defensive stocks, given the turmoil that we've seen elsewhere.
"Fisher and Paykel Healthcare as well, obviously as an exporter and a key beneficiary of the weaker New Zealand dollar, is up again. So there is a handful of stocks that are performing well but, by and large, it's a pretty rough day out there for investors."
Meridian Energy's share price rose 4.5 cents to $1.54, Contact Energy rose 7 cents to $6.03, Fisher and Paykel Healthcare was up 2 cents to $5.22 and Xero was down $1.80 to $19.15 - the lowest it has been in over a year.