KEY POINTS:
The New Zealand dollar pottered around yesterday's range, but demand was strong and dealers predicted it would break beyond the US70c level during the holiday break.
The dollar closed at US69.71c against US69.57c yesterday, when the kiwi dropped briefly as investors digested weaker-than-expected gross domestic product.
Dealers initially feared the data would crimp hopes of an interest rate hike, but volumes today were robust, in line with a softer pre-holiday greenback.
ANZ senior dealer and technical analyst Mark Elliott noted that since mid-November the kiwi had risen 4 cents from US65.75c.
"So yesterday's GDP number, while negative, all it did was create a short-term shakeout...and it's just left the market unencumbered with potential sellers on the top."
He predicted the kiwi dollar would climb as high as US71c over the holidays.
"Markets are thin and we're aware of some decent buying interest around the market. The US dollar looks vulnerable still."
The kiwi was also stronger against its other trading partners including the Australian dollar at A88.75c, compared to A88.55c yesterday.
The BNZ noted US consumption and inflation data out tonight would be the first test of the kiwi's strength.
US housing, payroll and manufacturing data have fuelled concerns about a cut in interest rates there, despite assurances by the Federal Reserve.
The New Zealand dollar has risen nearly two per cent this year, remaining resilient against forecasts because of investor appetite for high yield.
Rates:
5pm today 5pm yesterday
NZ dlr/US dlr US69.71c US69.57c
NZ dlr/Aust dlr A88.75c A88.55c
NZ dlr/euro 0.5285 0.5273
NZ dlr/yen 82.43 82.35
NZ dlr/stg 35.43p 35.37p
NZ TWI 68.70 68.56
Australian dollar US78.54c US78.56c
Euro/US dollar 1.3188 1.3192
US dollar/yen 118.27 118.38
- NZPA