NZ dollar slides after Fed flags easing THE New Zealand dollar fell, hit by a triple-whammy of weak local growth data, a slowing manufacturing sector in China and the Federal Reserve signalling plans to wind back its bond-buying programme. The kiwi fell to 78.54 US cents at 5pm from 78.84 cents at 8am, and 79.88 cents on Wednesday. The trade-weighted index sank to 73.74 from 74.12. Drought held back New Zealand's economy in the first quarter, with gross domestic product growing 0.3 per cent in the three months ended March 31, half the 0.6 per cent rate predicted in a Reuters survey of economists. Weaker than expected Chinese manufacturing figures added to the kiwi's woes, sending it lower after the HSBC manufacturing Purchasing Managers' Index dropped to 48.3 in June, missing economists' forecasts. Traders were already downbeat on the kiwi after Fed chairman Ben Bernanke said the central bank may reduce its bond buying programme this year and end it next year should the world's largest economy continue to improve. The Federal Open Market Committee said at the conclusion of a two-day meeting that risks to the US economy have decreased, as they lowered forecasts for unemployment and inflation this year. "This is definitely a correction towards what most people think is fair value," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. Most people accept somewhere in the 70s (US cents) is where the export sector should be able to live. Tennent-Brown said the local currency probably won't move too much further with most investors having taken their positions after the Fed meeting, though as long as markets remain volatile, the "kiwi and Aussie are going to struggle." The local currency gained to 84.87 Australian cents, having earlier touched a four-year high of 85.03 cents, from 84.16 cents at 5pm. The kiwi was little changed at 76.13 yen from 76.09 yen on Wednesday. The New Zealand dollar slid to 50.84 euro cents from 59.65 cents and weakened to 59.21 British pence from 51.09 pence.