KEY POINTS:
The New Zealand dollar climbed to US76.54c today as the greenback showed continuing weakness against key currencies.
It started the day on a firm note - US75.95c at 8am, up from US75.70c at 5pm last Friday - and climbed steadily through the session.
ANZ predicted tests of resistance at higher levels this week and the BNZ noted that US76c is where the NZ Reserve Bank first intervened.
"This climb in the NZD will surely knock the nascent recovery among exports," the BNZ said in it market outlook.
A senior dealer at ANZ Investment Bank Mark Elliott, said he expected the kiwi to top US77c over the next week or so. At 5pm the NZ dollar was trading at US76.54, a seven-week high since it was at US76.87 on August 9.
Against the Australian dollar, the New Zealand dollar was A85.96 at 5pm from A85.87c on Friday.
At the same time, the trade-weighted index was also up at 71.66, from Friday's 71.21- a rebound of about 6 per cent over the past three weeks and about the same margin higher than the level the RBNZ assumed for this fourth quarter. The rise and rise of the kiwi is against the background of the slumping US dollar, bumping record lows against the euro and other key currencies.
"We're benefiting by default from the weak US dollar," Mr Elliott said. "We've seen steady demand for the kiwi all day, both local and offshore interest."
"I would expect that somewhere in the vicinity of US77c this thing's going to run out of steam and we should see a pull-back of 3c or 4c from that level over the next two weeks".
The weakness of the US dollar was likely to be reflected in strengthening of the Japanese yen, and this could affect the "carry trade" investment in NZ dollars".
Reuters currency rates
5pm today 5pm Friday
NZ dlr/US dlr US76.54c US75.70c
NZ dlr/Aust dlr A85.96c A85.87c
NZ dlr/euro 0.5367 0.5347
NZ dlr/yen 88.10 87.22
NZ dlr/stg 37.43p 37.43p
NZ TWI 71.66 71.21
Australian dollar US89.07c US88.22c
Euro/US dollar 1.4265 1.4162
US dollar/yen 115.79 115.19
- NZPA