The kiwi charged to its highest level since it floated nearly twenty years ago in late trading today.
It soared to US72.98c in frantic action before easing back at the close to US72.75. It had closed yesterday at US72.37.
Dealers believe it will break higher levels as US banks that were out for a long weekend catch up on the action.
The kiwi has gained 64 percent since it was floated on March 4, 1985 at US44.4c.
Following a likely break above US73c, the kiwi is forecast to "consolidate" or "correct" in the wake of its big run of the past two weeks.
"I think it will certainly scoot higher," BNZ chief dealer Mike Symonds said.
"The risks are very much pointed higher and I think it's only a question of time before the currency attacks US73c and above."
The announcement of a $NZ468 million Uradashi loan today issued by the Asian Development Bank underscored the scamble by Asian investors to get hold of high yielding kiwi dollars. The two-year New Zealand dollar denominated Uradashi bonds have a 5.48 percent coupon.
"It underscores that yield-related demand and the issuance-related interest is still very much to the fore," Mr Symonds said.
The kiwi's strength waas mainly been propelled by weakness in the US dollar, which lost ground in Asia against the euro today. The euro closed here at $US1.3148 compared with $US1.3042 yesterday.
Support for the kiwi also came from the Australian dollar, rising on the prospect of higher interest rates. It finished at US79.05c compared with US78.69c yesterday.
Mr Symonds said the Reserve Bank's March 10 Monetary Policy Statement would be critical to the kiwi's direction.
"The Reserve Bank clearly has a fine balancing act to consider. The evidence by way of data has continued to print on the stronger side, but when you take into account the fact that we have seen a significant move in the (currency) Trade-Weighted Index in the last two weeks, some people are now questioning whether an RBNZ rate rise on March 10 is a certainty."
Westpac currency stategist Johnathan Bayley said the Reserve Bank must be starting to consider whether to use its new powers of intervention to curb the kiwi,but Mr Symonds doubted that.
"I don't believe it's an option they are seriously considering at this time."
The kiwi also hit a fresh eight-year high against the British pound at 38.38 pence and a 7-1/2 year high against the yen and was buying 76.71 yen this morning (76.45 at 5pm yesterday). It closed today at 76.45.
On the other crosses the kiwi was buying A91.03c (A91.91c), 0.5532 euros (0.5545) and 0.8542 Swiss francs (0.8569).
The Trade Weighted Index (TWI) continued to find fresh highs, hitting 70.59 -- its highest since 1985. It finished at 70.41 (70.31). The monetary conditions index was at plus 1044 (1027).
On the money markets, 90-day bank bill yields were unchanged at 6.86 percent, July 2009 bonds were at 6.16 percent (6.13) and April 2015s were at 5.98 percent (5.97).
- NZPA
<EM>Currency:</EM> Kiwi dollar charges to post float-high
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