The rallying gold price drove the Australian dollar up yesterday, which in turn gave an otherwise uninspired kiwi a free ride to a 2 1/2 month high.
The kiwi closed at 42.87USc (42.59c on Friday) while the aussie was at 52.89c (52.72c).
The kiwi traded lightly in a very narrow range, the top of that range being its highest point since early March.
A currency dealer said the aussie rose as the price of gold rallied over the weekend, and that rally continued yesterday, from $US284 to $US298. That pushed the aussie as high as 53.15USc before it tailed off.
The dealer said the fate of the aussie rested on the gold price which may challenge $US300 overnight in London and New York.
A speech by Reserve Bank governor Don Brash yesterday had no impact, and the dealer said the Budget on Thursday would be of little interest except for Treasury's growth forecasts.
The kiwi ended at 81.02Ac (from 80.85c), 52.74 yen (52.33), 29.71 pence (29.75), 0.9501 marks (0.9444), 0.7455 Swiss francs (0.7404), and 0.4859 euros (0.4827).
Hong Kong and Shanghai Banking Corporation said local bonds struggled after American Treasuries were troubled by a growing view that the Federal Reserve has finished cutting interest rates for now.
- NZPA
<i>Currency:</i> Gold's surge hoists up kiwi
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