KEY POINTS:
The New Zealand dollar powered through the US70c mark today, dealing a fresh blow to exporters.
The New Zealand dollar was at US70.21c at 5pm, its highest level in three weeks, and up from the US69.61 close on Friday.
BNZ currency strategist Danica Hampton said trading was very thin due to a holiday in the US on Monday and the Chinese New Year celebrations in Asia so movements should be taken with a grain of salt.
But the trend in the US dollar was down unless a January Consumer Price Index and release of Federal Reserve Monetary Policy minutes this week changed investors' views.
Weakness in the US dollar has been the main driver of the New Zealand dollar but this morning there was talk that when someone rang around for a Kiwi quote they were given a high one "out of the market" and it went through as a trade.
The high quote triggered stop loss orders and a squeeze on traders holding short positions -- those who had previously sold the currency -- ensued.
"The New Zealand dollar was the strongest performing currency last week, supported by the generally weak US dollar, and upbeat local data which underpinned Reserve Bank of New Zealand rate hike expectations," BNZ said in its weekly market outlook.
With little economic data out locally this week the focus is on a Bank of Japan monetary policy decision on Wednesday and the events in the US.
Against the aussie, the kiwi was buying A89.10c today, from A88.70c at 5pm on Friday. Against the euro it was at 0.5337 from 0.5299, and against the yen at 83.85 from 83.10. The trade weighted index was 69.34 from 68.83.
The US dollar steadied at the end of last week, but still posted its steepest weekly decline in two months against a basket of major currencies.
A spate of weak US economic reports last week, capped on Friday by a slide in a benchmark gauge of consumer confidence, advanced the case for the Federal Reserve to cut interest rates later this year.
Reuters currency rates:
5pm today 5pm Friday
NZ dlr/US dlr US70.21c US69.61c
NZ dlr/Aust dlr A89.10c A88.70c
NZ dlr/euro 0.5337 0.5299
NZ dlr/yen 83.85 83.10
NZ dlr/stg 35.93p 35.67p
NZ TWI 69.34 68.83
Australian dollar US78.82c US78.48c
Euro/US dollar 1.3155 1.3138
US dollar/yen 119.42 119.38
- NZPA