Hopes rose yesterday the New Zealand dollar would stay lower for longer as dairy prices continue to fall and the United States ends its financial stimulus package next month.
However, Craigs Investment Partners broker Chris Timms said while the currency had fallen almost 10% against the US dollar since July, the pattern was repeating.
The dollar had traded in a range of US75c to US85c since 2011 and on three separate occasions it had fallen more than 10% only to rise again.
''We suspect there is further weakness to come for the dollar and this time, it might last.''
Across the Tasman, the Australian dollar hit a fresh seven-month low after the release of stronger US economic growth figures.
Mr Timms said dairy prices were likely to keep the kiwi on the back foot.
The dairy payout looked like it would be down by a third compared with last year, taking several billions of dollars out of farm incomes.
The average payout over the five previous years was $6.80 and the current $5.30 forecast weaker than seen for some time.
''We have to go back to the 2008-09 season to find a payout close to those levels when Fonterra paid $4.72 a kilogram of milk solids.
''We are getting close to a change of tack from the US central bank, which has spent the last five years with near-zero interest rates and a substantial money-printing programme which peaked at a pace of more than $US100 million an hour.''
The money-printing exercise was likely to stop next month and could be followed next year by interest rate rises in the US, Mr Timms said.
The rate rises would be gradual but it was still a significant milestone. If the US dollar stayed in vogue with global money markets for a sustained period, the weakness in the New Zealand currency could accelerate.
Generally, some sustained New Zealand dollar weakness would be good for export industries and the sharemarket.
Companies with international operations, such as Fisher and Paykel Healthcare, Delegat Group, Diligent and Mainfreight, would do ''particularly well''.
Tourism would get a boost with companies such as Air New Zealand and Auckland International Airport feeling the benefits.
''It will also benefit investors who have taken advantage of the strong currency over recent years to diversify into offshore markets and add to their global investments.''
But New Zealanders should not hope for a complete capitulation of the dollar, Mr Timms said.
If the dollar fell too far, inflation might start to increase as imports cost more and businesses increased prices to pass those costs on to consumers.
That would become a drag on real wages and could see the Reserve Bank start to think again about interest rate rises.
''There is definitely a sweet spot for the exchange rate and it's probably somewhere between US70c and US75c.''
