The New Zealand dollar was the weakest performer of major currencies overnight, after comments by Finance Minister Bill English that the kiwi may be 20 per cent overvalued added to its downward momentum.
The kiwi fell to 83.02 US cents at 8am in Wellington, from 83.46 cents at 5pm on Tuesday, and was the weakest performing currency overnight according to Reuters calculations. The trade-weighted index weakened to 77.83 from 78.26.
The New Zealand dollar declined after the Reserve Bank of Australia published the minutes from its last meeting, signalling it was not going to try to push the Aussie down any lower, luring in speculative investors who bet it will appreciate.
That dampened demand for the kiwi which was hit further after Mr English said the local currency is overvalued.
"The move had already started after the RBA minutes yesterday from Australia and we saw kiwi/Aussie selling coming in to the market," said Stuart Ive, senior advisor at OMF.
"We have seen profit taking coming in on the kiwi's failure to move any higher," he said. The currency had buying support at around 83 US cents, he said.
"We may just tread water now around these levels until we get clearer direction," Mr Ive said. "I don't think we are going to run away to the downside."
The New Zealand dollar dropped to 91.89 Australian cents at 8am in Wellington from 92.08 cents, slipped to 60.35 euro cents from 60.86 cents, weakened to 49.74 British pence from 49.88 pence and fell to 84.95 yen from 85.45 yen.
