The New Zealand dollar retreated from its overnight highs, but looked likely to continue its climb with little interruption.
By 5pm the kiwi was at a fresh 40-month close of US53.16c, up from Monday's close of US52.81c, but down from US53.33c reached before the Wellington session began.
The kiwi was helped up by the Australian dollar which rose more than half a United States cent to US57.50c (US56.94c Monday).
Murray Hindley, ANZ chief foreign exchange dealer, said the kiwi opened on its session highs and drifted off, travelling between a range of US53.12/30c.
"Maybe just a bit of profit-taking. We haven't really had a correction on this move which has broken higher for the last two months.
"We've lost a little bit of ground against the aussie in the last two sessions, maybe that's starting to weigh on the kiwi a little bit as people take some profit on that (trans-Tasman) cross.
"It's been a pretty quiet session otherwise. (The kiwi) should have some support around here.
"If we do break US53.10c then we may see a further correction back to US52.80c, but any corrections look pretty short-lived at this stage," Mr Hindley said.
Volumes were reasonable.
Against the aussie the kiwi slipped to A92.49c (A92.72), and the Australian dollar strengthened to $NZ1.0816 ($NZ1.0785).
Offshore, the US dollar rose against the yen and the euro as firmness on Wall Street backed by US President George Bush's proposed $US600 billion ($NZ1.14 trillion) economic package helped fend off worries over Iraq.
Traders also said efforts by Japanese officials to talk down the yen also helped the greenback.
At 5pm in Wellington the euro was at $US1.04445 ($US1.0436) after hitting a three-year high of $US1.0503 on New Year's Eve.
The greenback rose to 119.45 (119.33).
The kiwi gained against its other major trading partners, buying 0.5090 euro (0.5061), 63.50 yen (63.02), 33.09 pence (32.82), and 0.7417 Swiss francs (0.7366).
The trade-weighted index was at 59.34 (59.03), 90-day bank bills were unchanged at 5.94 per cent, and the monetary conditions index was at plus 87 (plus 61).
On the debt market, the April 2004s were at 5.75 per cent (5.79), the November 2006s were at 5.92 per cent (5.96), the November 2011s were at 6.17 per cent (6.22), and the April 2013s were at 6.20 per cent (6.26).
- NZPA
<i>Currency:</i> Kiwi down from fresh highs, looks set to continue rise
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