The New Zealand dollar piggybacked higher on a firming euro today, where economic pessimism eased.
There were few local factors influencing the kiwi, which closed on US68.52c against its US68.23c close yesterday.
The United States dollar slipped for a second day after upbeat European factory data helped temper investor pessimism about the euro while the yen firmed as the Nikkei stocks index hit a 13-month high.
Despite another piece of strong US economic data showing factory growth surging to a seven-month high, traders said the market was looking beyond the Federal Reserve's expected interest rate rises over the coming months.
The euro zone manufacturing data bolstered expectations the European Central Bank will hold interest rates steady, rather than cut them.
The Australian dollar firmed for the same reasons as the kiwi -- to US76.32c from US75.97c yesterday.
BNZ currency strategist Sue Trinh said commodity currencies found support from a broad decline in the US dollar.
However, she said the current account balances and falling growth rates for the kiwi and the aussie dollar would limit the rise of both currencies.
The euro closed here at US$1.2207 (US$1.2184 late yesterday) while the US dollar eased to 111.93 yen from 112.17.
In the absence of any local data this week, market commentators expect the New Zealand dollar to remain focused on international developments.
Interest rate decisions are expected from the Reserve Bank of Australia, Bank of England and the European Central Bank.
On its crosses, the kiwi closed at A89.80c (A89.86c), 0.5615 euro (0.5603), 38.70 British pence (38.73), 0.8745 Swiss francs (0.8753) and 76.70 yen (76.57).
The TWI finished on 69.10 (68.98) and the monetary conditions index on plus 958 (948).
On the money market, 90-day bank bill yields closed little changed on 7.04 per cent (7.03), the 2009 bond yields closed on 5.81 per cent (5.78), and April 2015s on 5.81 per cent (5.72).
- NZPA
<EM>Currency: </EM>Kiwi piggybacks Euro higher
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