KEY POINTS:
The New Zealand dollar early today hit a six-week high against the greenback and a month high against the Australian currency.
Yesterday it also hit a 15-month high against the euro and a 17-year high against the yen.
By 8.20am the kiwi was buying US74.66c from US73.96c at 4.30pm on Friday, while against the Australian dollar it was at A89.50c, having climbed a cent since Thursday night.
Bank of New Zealand currency strategist Danica Hampton said the NZ dollar had the dubious honour of being the strongest performing currency last week.
It had shrugged off Friday's stronger than expected United States non-farm payrolls release and instead climbed to a six-week high, Ms Hampton said today.
The evidence of rebounding US growth was one of the factors behind the New Zealand currency's recent rise.
It had boosted investors' risk appetite and reinvigorated demand for carry trades -- where investors borrow in low-yielding currencies such as the yen and invest in higher-yielding assets such as the kiwi.
Solid demand for the NZ dollar against the yen had pushed the kiwi to 91.10 yen, its highest level since August 1990, and helped underpin the kiwi against the greenback.
A range of offshore funds, models and momentum-driven funds had also been heavy buyers of the kiwi against the greenback, Ms Hampton said.
Many of those short-term speculative accounts were looking to trim short NZ dollar positions ahead of the Reserve Bank's interest rate decision this Thursday.
By 8.20am today the kiwi had eased to 90.90 yen from its high yesterday evening, but was still up from 90.65 around 4.30pm on Friday.
Against the euro the kiwi was up to 0.5534 this morning from 0.5498. The trade-weighted index was at 72.61 from 72.12.
The US dollar weakened across the board overnight after failing to extend gains seen after last week's strong jobs data, while the euro and other currencies linked to rising interest rates strengthened.
The euro hit a record high against the low-yielding yen and sterling.
A tumble of more than 8 per cent in China's benchmark equity index only provided a brief respite for the yen, unlike in February, when a sell-off in the Shanghai bourse boosted the Japanese currency and sparked slides in global stock markets.
- NZPA
