The New Zealand dollar fell below US78 cents on Friday and a currency analyst says it could drop further as investors shy away from risk.
The dollar fell following the release of modest economic growth figures and a gloomy growth prediction from the US Federal Reserve.
By 5pm on Friday, the kiwi was buying US78 cents, up slightly from its low of 77.5 cents.
Westpac currency strategist Imre Speizer says it is possible the currency could drop to the low seventies in the coming month.
Mr Speizer said GDP figures showing modest 0.1% growth in the three months to June compared with a revised 0.9% in the previous quarter will hang over the markets for the next week or two.
The market will also dwell on the deepening European debt crisis, and if global risk sentiment continues to fall investors will bail out of the New Zealand dollar.
"The world's markets still own a lot of kiwi dollars in a speculative sense and if we get further weak risk sentiment you'll certainly see those positions cut."
That would push the New Zealand currency lower against its US counterpart.
