The New Zealand dollar rose back above 81 US cents after US Treasury Secretary Timothy Geithner indicated a resolution to the so-called "fiscal cliff" could be achieved within weeks, which would end a threat to the world's biggest economy.
The New Zealand dollar traded at 81.17 US cents from 81.21 cents in late New York trading on Friday. The trade-weighted index held at 73.07.
Geithner told Bloomberg that White House talks between President Barack Obama and congressional leaders were "a good meeting, and the tone was very good. I think this is doable within several weeks.
" If US political leaders can't compromise, the world's biggest economy could contract early in the New Year as consumers and businesses slam on their spending brakes at the same time as taxes rise and the government is forced to cut its programmes.
"A key contributor to Friday's optimism was US fiscal cliff discussions reportedly getting off to a good start," said Mike Jones, currency strategist at Bank of New Zealand. "While this is encouraging, we caution that there is plenty of water to go under the bridge yet."