KEY POINTS:
The Federal Reserve's decision to cut United States interest rates more aggressively than expected sent the New Zealand dollar racing to a five-week high.
From around US56.40c about 8.20am, the kiwi rose to US57.90c within 20 minutes, and by 5pm it was near session highs at US58.05c.
The Federal Reserve aggressively cut its target for overnight interest rates to a record low zero to 0.25 per cent, and said it would employ "all available tools" to dispel a year-long recession.
The surprise move to lower its target for the benchmark federal funds rate by 0.75 percentage points to up to a full point from its prior 1 per cent put the Fed in unprecedented policy territory. Financial markets had expected the Fed to lower rates by no more than three-quarters of a point.
"Everything has shown strength against the US dollar," one dealer said.
"Market sentiment has turned around. A week ago everybody wanted to buy the US dollar and now everybody wants to sell it and buy other things," he said.
The kiwi was little changed against the Australian dollar at A83.40c at 5pm from A83.50c yesterday.
Against the euro, the NZ dollar edged up to 0.4122 at 5pm from 0.4073 at yesterday's local close, while the kiwi also gained on the yen, up to 51.50 from 50.57. The trade weighted index was 55.94 from 54.89 yesterday.
- NZPA
