The New Zealand dollar's seeming inexorable drive up continued today with the kiwi setting a fresh 6-1/2 year high of US67.07c.
The New Zealand dollar rocketed above the US67c mark in overnight trading after the US Federal Reserve confirmed its low interest rate stance, a dealer said.
However by the close, the kiwi had eased back to US66.94c. That is still half a cent higher than yesterday's close.
It was a similar story for the Australian dollar, which finished at US76.70c (US76.33c yesterday) after earlier peaking at US76.88c, its highest since May 1997.
Deutsche Bank dealer Phil Lindberg said it would not be at all surprising if the kiwi pulled back given the speed of its advance.
However, retreats were likely to be limited as long as the world continued to have a negative view of the US dollar.
BNZ currency strategist Sue Trinh said the kiwi's surge above the US67c mark came after Fed Reserve governor Ben Bernanke said it was right to hold rates at 1 per cent, their lowest in 45 years.
"It (the kiwi) looks like it's taken a bit of rocket fuel over the past 24 hours, and that goes for the aussie too," Ms Trinh told NZPA today.
"Pretty much the US dollar has been downtrodden across the board after the Fed Reserve governor's comments.
"Also supporting the kiwi and aussie you had commodity prices as a whole rally very strongly over night," she said.
There was also talk that Japan might investigate importing its beef from Australia and New Zealand after the confirmation of bovine spongiform encephalopathy in the United States.
At the moment, 2004 looked as if it would be another bumper year for the kiwi against the greenback, after gains of 25 per cent in 2003 and more than 20 per cent in 2002.
In the major currencies, the US dollar closed in Wellington at 106.14 yen (106.95), while the euro ended at US$1.2678 ($1.2662).
On the crosses, the New Zealand dollar was buying A87.20c (A87.04c), 0.5277 euro (0.5247), 71.00 yen (70.01), 37.02 British pence (36.97), and 0.8246 Swiss francs (0.8190).
The monetary conditions index was at plus 564 (549), the trade-weighted index was at 66.02 (65.75), and 90-day bank bills fell to 5.39 per cent from 5.43 per cent.
On the debt market, February 2006 bond yields fell to 5.66 per cent (5.70) and November 2011 yields were at 6.03 per cent (6.04).
- NZPA
<i>Currency:</i> Kiwi breaches US67c but fails to hold new mark
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