KEY POINTS:
The New Zealand dollar hit five-week highs against the greenback and yen as it continued to strengthen following yesterday's interest rate cut in the United States.
That cut was followed by the NZ dollar's largest one-day rise against the greenback in nine years, lifting 3c to be buying US73.12c at 5pm yesterday.
It strengthened at a much more gentle rate during the night to be at US73.50c at 8am today.
Against the Japanese currency, the kiwi rose to 85.27 yen at 8am today from 84.71 at 5pm yesterday.
Bank of New Zealand currency strategist Danica Hampton said the NZ dollar had rallied strongly since yesterday's US rate cuts, supported by a healthy mix of local real money demand as well as technical/momentum funds chasing swings in market sentiment.
The ANZ bank said the US rate cuts had injected some confidence back into global markets.
That had seen the return of the carry trade - in which investors borrow low interest rate currencies to invest in higher yielding assets - resulting in strong demand for the New Zealand and Australian currencies.
NZ dollar direction would be determined early by second quarter current account data due out from Statistics New Zealand at 10.45am today, ANZ said.
Along with its gains against the yen and greenback, the kiwi was up against other major currencies, hitting a three-week high against the euro and against the Australian dollar briefly topping A86c for the first time in 2-1/2 weeks.
At 8am today the kiwi was buying 0.5264 euro from 0.5230 at 5pm yesterday, while against the aussie it was at A85.88c from A85.73c. The trade weighted index was 69.90 from 69.52.
The US dollar rose from a 15-year low against a basket of currencies overnight as investors bet the Federal Reserve's interest rate cut yesterday will help boost a slowing US economy.
The Fed slashed the fed funds rate to 4.75 per cent from 5.25 per cent to help relieve strains in credit markets.
CURRENCY RATES
(8am today 5pm yesterday)
NZ dlr/US dlr US73.50c US73.12c
NZ dlr/Aust dlr A85.88 A85.73c
NZ dlr/euro 0.5264 0.5230
NZ dlr/yen 85.27 84.71
NZ dlr/stg 36.72p 36.31p
NZ TWI 69.90 69.52
Australian dollar US85.59c US85.29c
Euro/US dollar 1.3958 1.3980
US dollar/yen 116.05 115.84
- REUTERS
