The New Zealand dollar had a whipsaw day, battered by opposing forces, but ended the day lower against the US dollar and the British pound while little changed against the currencies of other major trading partners.
Bancorp Treasury Services senior client advisor Peter Cavanaugh says the United States Federal Reserve deciding to reduce its economic stimulus boosted the US dollar and trumped New Zealand's very strong September quarter growth figures.
He says the world has been totally focused for some time on when the Federal Reserve would start its tapering.
Mr Cavanaugh says the tapering consensus was around March, but January brings it forward which means there is a repatriation of US dollars from around the world and that's reflected in the lower New Zealand US exchange rate.
The New Zealand economy grew 1.4% in the September quarter, thanks to a surge of activity in the dairy sector.
Just after 5pm on Thursday, the New Zealand dollar was buying 81.8 US cents, two-thirds of a cent down from the same time on Wednesday, and it was down about two-thirds of a penny at 49.96 British pence.
It was trading at 92.59 Australian cents, 0.5988 euro and 85 yen.
Sharemarket rises
The sharemarket rose, the benchmark Top 50 Index gaining 31 points to 4707.
New Zealand's market tracked the stronger US market which was reassured that the Fed will still be buying $75 billion in bonds each month from January, just $10 billion less than currently.
As well, higher US interest rates are even further into the future.
The stand-out stock in the New Zealand market was Lyttelton Port after the company announced a $450 million insurance payout.
Chairman Trevor Burt says the settlement gives the port freedom to optimise the rebuilding of its facilities.
He says the advantage of a settlement that is full and final and in a lump sum is that it provides flexibility to rebuild the assets in a style, location and timeframe that suits the port rather than in a way that suits the optimisation of the insurance claim asset by asset.
Shares in Lyttelton Port jumped 83 cents, or more than 34%, to $3.24.
Among other stocks, Telecom shares climbed 6 cents to $2.35, Ebos rose 20 cents to $9 and Fletcher Building gained 18 cents to $8.53.
Chorus bucked the trend, its shares falling 3 cents to $1.40.
Airworks shares began trading on the NZX on Thursday following its $37.5 million capital raising from selling shares at $2.60 each.
The shares began trading at $2.73 and ended the day at $2.75, the high for the day.
