KEY POINTS:
The New Zealand dollar sprinted higher today to leave the kiwi on the edge of new post float highs.
The kiwi also burst above US90c against the aussie dollar and was at a 20-year high against the yen, leaving the trade-weighted index also on the cusp of a post-float high.
Only very briefly in 2005 has the TWI higher, indicating the kiwi's strength is the result of US dollar weakness.
The kiwi closed locally at 4.30pm on its high of US76.38c against US75.90c yesterday.
With no sign of Reserve Bank intervention, dealers said it was virtually inevitable new peaks would be set.
There is some wariness of intervention after the central bank sold kiwi dollars on Monday and the previous Monday.
BNZ chief dealer Mike Symonds said there was heavy demand out of Japan and Asia generally throughout today's session.
"No sign of central bank action has emboldened the leveraged accounts and other more speculative accounts to add to their positions."
"The carry trade is still very much to the fore. There is just continued appetite and it is a simply supply and demand issue."
"The basic trend of currencies with prospects of rising interest rates strengthening remains intact," said Nobuo Ibaraki, a forex manager at Nomura Trust and Banking.
The Australian dollar remained strong, but the kiwi was stronger, climbing to A90.32c -- over half a cent stronger that its A89.72c close yesterday.
Mr Symonds said although the market was watchful of the Reserve Bank, he noted the bank is not trying to defend a level.
"The intervention strategy was aimed at trimming the peaks. The only message I'm getting from the central bank action is they are sending a signal the kiwi is approaching a peak in the cycle. "We certainly don't think the Reserve Bank has drawn a line in the sand. They are trying to slow the ascent in the currency."
The NZ dollar has spent only brief periods above A90c since February 2006.
ANZ bank today said potentially higher Chinese interest rates, while not yet announced, had dented the fortunes of the aussie.
Against the yen the NZ dollar continued to power upwards, ended today on 94.41, its highest level since 1987.
The yen, tethered to Japanese interest rates at just 0.5 per cent, continued to suffer as investors borrow it cheaply to finance purchases of higher-yielding currencies and assets.
The kiwi strengthened against the euro at 0.5697 -- its highest against the European currency since February 2006, apart from a few days this month.
In major currency trading, the yen hung near a 4-1/2-year low versus the US dollar.
The Bank of Japan is expected to boost interest rates as early as August, but the interest rate differential with other countries is still wide enough to feed Japanese investor appetite for higher-yielding foreign assets, traders said.
Reuters currency rates:
4.30am today 4.30pm yesterday
NZ dlr/US dlr US76.38c US75.90c
NZ dlr/Aust dlr A90.33c A89.72c
NZ dlr/euro 0.5697 0.5652
NZ dlr/yen 94.41 93.65
NZ dlr/stg 38.32p 38.20p
NZ TWI 74.37 73.87
Australian dollar US84.48c US84.65c
Euro/US dollar 1.3396 1.3326
US dollar/yen 123.65 123.34
- NZPA