The New Zealand dollar closed in on its highest level since it was floated in 1985 on a trade-weighted index basis.
The TWI hit 72.00 today reflecting kiwi strength against the currencies of New Zealand's five main trading partners. It was at eight year highs against the Japanese yen and sterling and very strong against the euro and Australian dollar.
Against the US dollar, it closed at US69.46c, up from US69.14c at yesterday's close.
Producers Price Index data did nothing to dampen inflation fears today and increased the probability of a rate rise on December 8 and possibly another in January.
The inputs index jumped 1.8 per cent in the September quarter while the outputs index rose 2.9 per cent -- each well above economists' forecasts.
The PPI outputs index rose 4.1 per cent in the September year and the inputs index rose 6.1 per cent -- the highest annual rises since 2001.
The foreign exchange market's* underlying focus remained focused on any shifts in the outlook for interest rate differentials, particularly between the United States and the euro zone.
The US dollar steadied after slipping for two sessions on growing signs that after 12 straight interest rate rises the Federal Reserve may be nearing the end of its tightening cycle.
While New Zealand's central bank is displaying heightening concern about the inflation outlook, minutes from the US Fed's meeting in November suggested that some policy-makers were less concerned about inflation and more wary of allowing interest rates to rise too high.
That could put further upward pressure on the kiwi with another rate rise almost guaranteed on December 8.
The Australian dollar's rise against the greenback was mild -- US73.82c from US73.71c yesterday -- allowing the kiwi cross to rise to A94.15c from A93.77c.
The following are Reuters currency rates:
5pm today 5.30pm Wednesday
NZ dlr US69.46c US69.14c
NZ dlr/Aust dlr A94.15c A93.77c
NZ dlr/euro 0.5880 0.5853
NZ dlr/yen 82.50 82.04
NZ dlr/stg 40.32p 40.15p
NZ TWI 71.98 71.65
Australian dollar US73.82c US73.71c
Euro/US dollar US1.1820 US1.1812
US dollar/yen 118.72 118.65
- NZPA
<EM>Currency:</EM> NZ dollar nears post float record
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