Turmoil in Europe overnight has seen the New Zealand dollar tumble against a number of currencies.
From being worth US68.55 cents at 5pm yesterday the kiwi did drop as low as US66.55c -- a nine-month low -- before recovering to US67.68 at 8am today. It also dropped to 0.5464 euro from 0.5618 yesterday.
ANZ senior markets economist Khoon Goh, in the bank's morning brief, said the full scale liquidation of long Australasian positions began yesterday and was stepped up throughout the European session last night.
Markets reacted very badly to Germany's unilateral decision to ban "naked short selling" yesterday. "If it was designed to stop markets from falling further, then the plan backfired spectacularly."
In naked short selling, a trader sells a financial instrument short, betting that its price will fall, without first borrowing the instrument or ensuring that it can be borrowed, as would be done in a conventional short sale.
European equities slumped and the euro came under more pressure. Rumours that Greece would leave the euro led to a rally which in turn sparked a big short squeeze which sent it all the way up to nearly $US1.24.
The New Zealand and Australian currencies got hit hard as long positions got liquidated, both falling by two big figures at one stage, Mr Goh said.
"Today's New Zealand Budget may be the focus domestically, but for currency markets, the focus is still very much on the European situation and it will stay that way in the near term.
"Many will hope a range the size of last night's is not repeated throughout today's trading session."
The kiwi was also down to 61.95 Japanese yen from 62.97 and slipped 1 pence against the British pound, to 46.94p from 47.95p.
Against the Australian dollar, the kiwi was worth A80.09c, little changed from A80.15c yesterday.
The trade weighted index slipped to 65.62 from 66.71.