New Zealand currency in notes and coins. Photo: RNZ / Rebekah Parsons-King
The New Zealand dollar is under renewed pressure, falling below 56 US cents for the first time in more than two years.
The currency has fallen nearly three percent over the past week as financial markets have reacted to big rate rises being imposed by central banks to fight inflation.
The recent British government mini-budget, which plans to cut taxes but with increased borrowing, has been the latest trigger.
Wholesale interest rates have risen also amid fears that the anti-inflation fight may lead to a global recession.
The kiwi ranged between a high of 57.6 US cents in early trading and 55.65 US cents, the lowest since March 2020, before settling around 55.85 at the close of local trading.
ANZ economists said the currency was having a turbulent roller-coaster with global markets regaining some composure, only to capitulate again.
"The UK is at the core of the strife, but better US data is also adding to the US dollar's appeal."
Opinion over the near term future for markets and the currency was split between those believing the current turmoil is overdone which will correct, and others suggesting there was worse to come with a "tinderbox" of market discontent just waiting for a spark.
"We think it's more of the latter, and don't expect the going to get any easier, or for volatility to die down, anytime soon," they said.
New Zealand wholesale interest rates edged higher, and the sharemarket's losing streak continued with the benchmark NZX-50 falling another 95 points or 0.85 percent, to 11,120, the lowest since mid-July.