KEY POINTS:
The New Zealand dollar had a roller coaster ride today after a Reserve Bank interest rate rise and strong Australian jobs data, but it remained above US75c.
Reserve Bank governor Alan Bollard surprised economists by lifting the Official Cash Rate (OCR) to 8 per cent in the third hike this year.
Dr Bollard made no specific comment about future rate moves, but said a sustained period of slower growth in domestic activity was required to ease inflation pressures.
The rate hike pushed the NZ dollar up half a US cent, but the governor's later comments that he hoped he did not have to raise rates further shaved off about 30 points.
The kiwi then rose 40 points on the coattails of the Australian dollar after Australia's unemployment rate fell to a surprising three-decade low of 4.2 per cent.
By 5pm, the kiwi was at US75.61c, from US75.45c late on Wednesday afternoon, having traded between US75.13c and US75.69c.
Against the Aussie, the kiwi was at A89.29c from yesterday's A89.50c.
After reading Dr Bollard's toughly worded statement, economists believe at least one more rise is on the cards, possibly next month.
New Zealand's official rates were already the highest in the developed world and compare with Australia's rate of 6.25 per cent.
"We still expect it to be reasonably well-supported overnight. We think it will follow the Aussie tonight, and we're pretty bullish on the Aussie after those figures out from Australia today," a dealer said.
After charging through the US75c level on Tuesday evening for the first time since being floated 22 years ago, the kiwi has managed to stay above that level for most of the time since.
Among other currencies, the euro stayed on the back foot after the European Central Bank did not clearly suggest how much interest rates will rise following a widely expected lift to 4 per cent.
Reuters currency rates:
5pm today 5pm yesterday
NZ dlr/US dlr US75.61c US75.45c
NZ dlr/Aust dlr A89.29c A89.50c
NZ dlr/euro 0.5600 0.5578
NZ dlr/yen 91.62 91.59
NZ dlr/stg 37.94p 37.81p
NZ TWI 73.25 73.12
Australian dollar US84.69c US84.30c
Euro/US dollar 1.3506 1.3524
US dollar/yen 121.12 121.36
- NZPA