The New Zealand dollar fell below US50c for the first time in six years yesterday as investors see further signs of the country's economic weakness, ASB economist Chris Tennent-Brown said.
After recovering from US49.65c at 3am yesterday, it gained some traction above US50c in the early morning and at 5pm was trading up 0.58c.
Mr Tennent-Brown said following the drastic cut last week to New Zealand's interest driving official cash rate, by 1.5% to 3.5%, the kiwi had weakened before dropping below US50c, not seen since December 2002.
"Being in recession, and with commodity prices, the OCR cut has highlighted our economic weakness. We ($NZD investment) are falling out of favour in general with risk averse investors."
The outlook prompted Mr Tennent-Brown to offer a range of scenarios, with the kiwi possibly trading around US40c-US45c at the end of the year if exports are still weak, but if the greenback continues with its weakness and commodity prices get a boost the kiwi could be edging US60c, he said.
