The New Zealand dollar fell to the lowest in more than 17 months against the British pound after the Bank of England bet the UK housing market was strong enough to withdraw support for a lending scheme.
The kiwi dropped as low as 49.53 British pence early on Friday morning, the lowest level since June last year.
At 8am it had recovered to 49.74 pence from 50.07 pence at the 5pm market close on Thursday.
It also slipped to US81.29 cents from US81.65c.
The British pound strengthened after the Bank of England unexpectedly said it would end mortgage incentives for banks under its Funding for Lending Scheme from January 1.
The bank is ending the scheme, which allows banks to borrow from the BoE at discounted interest rates for mortgage lending purposes, to slow rising UK house prices and prevent the emergence of future imbalances.
"It is a tightening in monetary conditions and may be viewed by some as the precursor to a rise in interest rates. The move has pushed the GBP even higher, making a fresh high for the year," said David Croy, head of markets research at ANZ New Zealand.
Trading was quieter than normal because of the US Thanksgiving holiday.
In New Zealand on Friday, traders will be eyeing building consent figures for October at 10:45am which are expected to show a third month of gains.
New Zealand money supply data for October will be published by the Reserve Bank of New Zealand at 3pm.
The New Zealand dollar also weakened to 89.19 Australian cents from 89.43 cents after an Australian report showed stronger-than-expected private capital expenditure intentions.
The kiwi slipped to 83.09 yen from 83.32 yen and edged lower to 59.76 euro cents from 60.12 cents as German inflation data beat forecasts and European confidence improved.
The trade-weighted index slipped to 76.39 from 76.73.
Share
