The New Zealand dollar firmed against all major currencies today in the wake of yesterday's toughly-worded Monetary Policy Statement.
The kiwi spiked above US63c overnight but then hit selling and opened locally nearly half a cent lower. During the day, it continued to edge ahead, ending on US62.72c from its US62.56c opening.
Against the Australian dollar, it ended on A84.22c from A84.25c yesterday, while the trade-weighted index finished on 63.02 from 62.85.
ANZ Investment Bank said the spike up for the kiwi was taken advantage of by offshore sellers, ensuring the kiwi spent little time above US63c.
However, the kiwi was getting support from the aussie, which continued to be well supported following yesterday's strong employment data, but kiwi gains were likely to be limited.
ANZ said that would no doubt have the Reserve Bank of Australia looking at when, not if, the next interest rate increase would be delivered in Australia.
That would make it nearly impossible for the NZ dollar to move above A85c for any length of time, ANZ said.
The US dollar held near a one-month high against the euro in Tokyo trading after rallying on indications that the European Central Bank would be modest in raising interest rates following its latest rise.
The ECB raised rates by 25 basis points to 2.75 per cent, disappointing some expectations for a rise of 50 basis points, and appeared to stamp out the possibility of cranking up the pace of future rate increases.
Gains against the euro also boosted the US dollar versus the yen, pushing the US currency to a six-week high.
"A lot of people thought that the dollar weakness trend could continue, but it doesn't seem that way anymore," said Hiroshi Yoshida, a trader at Shinkin Central Bank.
<i>Currency:</i> Dollar firms across the board
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