KEY POINTS:
The New Zealand dollar has kept rising through the night, having smashed through the US80c level yesterday evening for the first time since being floated 22 years ago.
Exporters could only look on in despair as the kiwi passed through the US80.50c level shortly before 6.30am today.
In the next few hours the NZ dollar hit a high of US80.59c, having risen strongly since about 1pm yesterday when the exchange rate was around US79.70c.
"It's just one way traffic at the moment," Anthony Byett of forex advisory firm fxmatters said.
The kiwi's overnight rise was not just against the greenback.
The pattern was also repeated against the euro and the yen, with the NZ dollar rising from early afternoon yesterday and through the night against both.
From about 0.5755 euro, the kiwi hit a peak of 0.5839 at 8am, its highest level since December 2005.
It was at its highest level in more than two decades against the Japanese yen, rising from around 96.20 to a high of 97.78.
The NZ dollar's rise was less marked against its Australian counterpart, with most of the gain being since 2.30am, when it was at A90.75c, to a high of A91.31c near 7am, the highest level in about a fortnight.
The trade weighted index also hit a new life high of 76.86, from 76.14 at 5pm yesterday.
Mr Byett said the NZ dollar's rise was part of a story that included the "huge" fall of the US dollar and rise of the Australian dollar, the euro and the British pound.
"But interestingly in the past few hours we've seen the euro and the aussie dollar back off a little bit ... but we just keep going up," he told Radio New Zealand around 7am today.
The overnight rise against the aussie above A91c, had come after the NZ dollar had done little against its trans-Tasman counterpart for a couple of weeks, generally staying between A90c and A91c.
As the Reserve Bank's Thursday review of official interest rates came closer, it appeared investors were getting a little more confident, Mr Byett said.
Many investors and commentators expect the Reserve Bank to lift what is known as the Official Cash Rate, from its present level of 8 per cent.
Mr Byett said the pattern after an OCR review had tended to be for the NZ dollar to back off a little, with around 2c typical.
So if the pattern continued after Thursday, the NZ dollar could back off to about US78c during next two or three weeks.
The key to a fall in the NZ dollar would be less inflationary pressure in this country, which would come when there was less demand in the economy, meaning lower growth rates.
"When we see that happen, we will see the NZ dollar quite likely plummet," Mr Byett said.
It could also be turned around quickly by what happened to the yen, the other weak currency at the moment due to low Japanese interest rates.
The low level of the yen would change one day, whether in the next month or six months, no one knew. But the yen was unsustainably low now.
- NZPA