KEY POINTS:
The New Zealand dollar hit a 10 month high today of US69.30c today after the United States Federal Reserve left US interest rates unchanged for the fourth straight time.
The kiwi ended on US69.12c against US68.98c at 5pm yesterday.
The US central bank left its target for the federal funds rate at 5.25 per cent.
The kiwi eased a little against the Australian dollar, ending the day on A87.75c from A87.89c yesterday, while the trade-weighted index finished on 67.82 from 67.76.
The ANZ bank said demand for the NZ dollar continued relentlessly as positive news filtered through on several fronts.
Increased Government surpluses yesterday, along with promises of fiscal responsibility, and the announcement of a small Eurokiwi issue had all added up to a strengthening NZ dollar, ANZ said.
Food prices rose just 0.1 per cent in November, showing easing inflation pressure from that front.
The US dollar remained weak against the euro after the Federal Reserve kept rates steady, as widely expected, and emphasised a slowdown in the housing sector, stirring anticipation that its next move could be to cut rates.
The yen hit another record low against the euro and plumbed eight-year lows versus sterling and the Swiss franc as more investors bet that the Bank of Japan won't raise rates at a policy meeting next week.
The US currency fell on Tuesday after the Fed said that "substantial" weakness in the housing market was a culprit of the recent slowdown in economic growth, while at the same time renewing its warning on inflation.
The euro was at US$1.3285, little changed from levels in late New York trade and well within range of a 20-month high of US$1.3370 touched earlier in December.
The euro was well supported, given that the Fed's statement comes after the European Central Bank lifted rates to 3.5 per cent just last week and is expected to keep raising rates next year, highlighting the dollar's dwindling yield advantage.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US69.12c US68.98
NZ dlr/Aust dlr A87.75c A87.89c
NZ dlr/euro 0.5204 0.5201
NZ dlr/yen 80.83 80.58
NZ dlr/stg 35.07p 35.17p
NZ TWI 67.82 67.76
Australian dollar US78.81c US78.53c
Euro/US dollar 1.3283 1.3263
US dollar/yen 116.93 116.76
- NZPA