The New Zealand dollar had another rough night, falling to a five-year low of almost US58.00c before recovering this morning.
It was trading at US61.12c at 8am today, down from US62.47c at 5pm yesterday but up on the overnight low of US58.17c.
It was last down around US58.00c in July 2003.
The New Zealand dollar was also down against the euro, yen and sterling, but up against the aussie.
The kiwi was at A90.35c at 8am from A87.70c at 5pm.
The Australian dollar also had a tough night sliding to US67.64c from US71.15c.
As international market turmoil continued, despite a coordinated move by world central banks to cut interest rates, people moved to currencies viewed as relative safe havens -- the US dollar and yen.
Bank of New Zealand currency strategist Danica Hampton said the NZ dollar was expected to remain under pressure.
"The NZ dollar/US dollar has plunged dramatically over the past 24 hours.
"Fears about a global recession took a heavy toll on Asian equity markets. The Nikkei fell 9.4 percent, its largest daily loss since 1987, which triggered heavy selling of growth sensitive currencies like Australian dollar and New Zealand dollar against the yen. The New Zealand dollar selling appeared to be triggered by Japanese margin accounts, but soon became more widespread."
The New Zealand dollar recovered some ground after world banks cut interest rates, she said.
The Reserve Bank of Australia's surprise 100 basis point interest rate cut this week has economists speculating that the Reserve Bank of New Zealand will move by the same amount, or at least 75 basis points on October 23.
But ANZ senior economist Khoon Goh said the cut would not "reduce volatility or increase liquidity in markets that are close to disintegration".
The kiwi was down to 0.4467 euro from 0.4590, 61.33 yen from 63.30 and 35.32p British sterling from 35.65p.
The trade-weighted index was down from 61.23 to 60.35.
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