KEY POINTS:
The New Zealand dollar bounced back today as investors regained their taste for risk.
It gained steadily from an overnight low of US75.30c, closing more than one US cent higher at US76.55c.
It made less headway against the Australian dollar, closing at A84.82c against yesterday's close of A84.75c. The Ausssie also enjoyed a carry trade-related updraft, up at US90.23c from US88.67c yesterday.
"Over the last 24 hours, there's been a clear recovery in risk apetitite,"' Westpac strategist Michael Gordon said.
"In offshore markets we saw US shares up quite strongly on not a lot of new information. I think it's more a sense that the fears about credit-related losses have been more than fully priced in."
A stronger than expected rise in September producer prices failed to materially affect the kiwi, but Mr Gordon said base interest rates - particularly in swap rates - were up after the strong numbers.
The kiwi also gained against other trading partners, including a one per cent rise against the yen to 85.05 (83.70 yen yesterday), on the view that the Japanese currency had risen too far.
The trade-weighted index rose to 70.46 (69.53).
The market was now keeping an eye on tomorrow's third quarter retail sales, Mr Gordon said.
"We're expecting a 0.5 gain for the month which is about the average forecast, but we expect reasonably strong volumes for the quarter after adjusting for inflation, which would give a further boost to the currency."
He expected the New Zealand currency to range between US76.20-US77.20c overnight.
During the September quarter the New Zealand dollar fell 1.3 per cent versus the US dollar, 1.3 per cent against the euro and 3.4 per cent against the yen.
Reuters currency rates
5pm today 5pm yesterday
NZ dlr/US dlr US76.55c US75.23
NZ dlr/Aust dlr A84.82c A84.75c
NZ dlr/euro 0.5222 0.5167
NZ dlr/yen 85.05 83.70
NZ dlr/stg 36.84p 36.51p
NZ TWI 70.46 69.53
Australian dollar US90.23c US88.67c
Euro/US dollar 1.4654 1.4563
US dollar/yen 111.13 109.96
- NZPA