The New Zealand dollar travelled further than expected yesterday after the euro reached parity with the United States dollar for the first time in about 2-1/2 years.
At 5pm the kiwi had risen to US48.81c from US48.73c at Monday's local close, while the aussie was at US56.28c (US56.08c).
One local dealer said the euro led the way.
"It took the aussie higher, and both aussie and kiwi went through levels that no-one would have been expecting them to get through," he said.
The kiwi saw a range during the day of US48.43/88c, and had the potential to head higher overnight.
"We're closing reasonably strongly, aussie's just backing off a little bit from its highs at the moment. But with euro looking like it could push higher, or at least consolidate at these levels, people will be back to buying dips again."
The kiwi was likely to trade between US48.65c and US49.05c overnight -- "barring anything out of the ordinary with the euro and the aussie".
The euro looked unstoppable once it breached the US$1 mark overnight, as a market lacking confidence in Corporate America held off buying the greenback.
In recent weeks the euro has looked ready to tackle the greenback but been knocked back once it came near.
The international money markets were awaiting key congressional testimony early tomorrow (NZT) by Federal Reserve Chairman Alan Greenspan, who is expected to reaffirm that the fundamentals of the US economy remain sound.
In New Zealand the euro closed at US$1.007, more than half a cent higher than yesterday's US99.45c local close.
The kiwi traded at A86.74c (A86.90c at yesterday's close), 56.74 yen (56.67), 31.04 pence (31.67), 0.7114 Swiss francs (0.7198) and 0.4844 euro (0.4900).
Against the kiwi, the aussie was buying $NZ1.1526 ($NZ1.1507).
On the money market, 90-day bills were unchanged at 6.03 per cent, the trade-weighted index was at 54.90 (55.02) and the monetary conditions index was at minus 293 (minus 283).
On the debt market, the April 2004 bonds were at 5.84 per cent (5.80), the November 2006 bonds were at 6.21 per cent (6.22), and the November 2011 bonds were at 6.55 per cent (6.50).
- NZPA
<i>Currency:</i> Kiwi, Aussie get boost as Euro holds above US$1
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