After hitting a post-float high against the Australian dollar and flirting with US72c overnight, the kiwi eased back slightly today.
The kiwi has surged ahead against most major currencies this week, as the market gears up for the Reserve Bank of New Zealand's (RBNZ's) interest rate announcement on Thursday.
At 5pm today the kiwi was buying A95.55c, down from the fresh high of A95.83c it hit overnight. Meanwhile it was fetching US71.74c, from US71.42c at 5pm yesterday and US71.98c at the beginning of today's local session.
It also hit fresh eight-year highs against the yen, euro and sterling.
The trade weighted index -- which measures the kiwi against a basket of major currencies -- was at 74.34 at 5pm today easing back from the fresh post-float high of 74.51 it hit earlier today.
The market is pricing in another 25 basis point rise in the Reserve Bank's official cash rate to 7.25 per cent on Thursday, maintaining the New Zealand dollar's high-yield status.
Some analysts warned that because the market had priced in the 25 point hike, there could be a slight fall in the kiwi post-announcement, in a case of "buy the rumour, sell the fact".
But Westpac senior economist Nick Tuffley said it depended on the wording of the RBNZ's accompanying statement, which is expected to give a few clues as to if and when the bank intends to hike again.
The Reserve Bank of Australia is meeting today, but is not expected to move interest rates from 5.5 per cent.
The following are Reuters currency rates:
5pm today 5pm Monday
NZ dlr/US dlr US71.74 US71.42
NZ dlr/Aust dlr A95.55 A95.79
NZ dlr/euro 0.6091 0.6106
NZ dlr/yen 86.84 86.63
NZ dlr/stg 41.21 41.28
NZ TWI 74.34 74.31
Australian dollar US75.05c US74.56c
Euro/US dollar US1.1780 US1.1694
US dollar/yen 121.02 121.33
- NZPA
<EM>Currency:</EM> Kiwi takes a breath after overnight surges
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