The New Zealand dollar fell as re-emerging fears about the health of Europe's heavily indebted economies sapped investors' appetite for higher-yielding, or riskier, assets and pushed stocks down across Asia.
The kiwi fell to 82.29 US cents at 5pm from 82.88 cents at 8am and 82.78 cents on Friday in New York. The trade weighted index declined to 73.16 from 73.48.
"From an economic perspective it just looks like a matter of time (before Spain asks for a bail-out), but from a political perspective it's another matter," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney.
"Over the week we should see a bit more firming up of the US dollar," which will bring kiwi down, he said.
Investors will be looking at German business confidence indicators in Northern Hemisphere trading after last week's tepid manufacturing data eroded optimism about the region's economic outlook.
The kiwi dollar will probably fall against the greenback this week, according to analysts surveyed by BusinessDesk.
The strength of the New Zealand dollar has sparked debate about the appropriate monetary policy targets of the Reserve Bank as central banks around the world embark on money printing exercises to increase the money supply and devalue their currencies.
That's seen the outgoing Reserve Bank governor Alan Bollard and Treasury Secretary Gabriel Makhlouf come out and defend the current settings.
The new governor's policy target agreement with Finance Minister Bill English includes a long-run average inflation target of 2 per cent, in addition to the medium-term target band of between 1 per cent and 3 per cent.
The New Zealand dollar fell to 63.54 euro cents from 63.78 cents on Friday and declined to 50.72 British pence from 50.99 pence. It decreased to 78.92 Australian cents from 79.11 cents and dropped to 64.20 yen from 64.79 yen.
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