The New Zealand dollar soared more than one cent following news the US might pause its tightening cycle of interest rates.
The kiwi dollar closed at US60.88c compared with US59.52c yesterday.
Before this morning's opening it bounced from a two-year low of US59.32c, to US60. 27c after the US Federal Reserve announced it was raising interest rates by 25 basis points.
Normally that would have had investors swinging in towards the greenback but some investors who were hoping for a larger increase pared back their long positions.
"People were really looking for a statement that was a little more hawkish than what they delivered," said Danica Hampton, a BNZ currency strategist.
"But NZ dollar sentiment is still negative."
The kiwi dollar also gained on other crosses and lifted off four-year lows against the euro, which is benefiting from higher European interest rates.
The NZ dollar was buying A82.14c from A81.74c at 5pm yesterday.
Against the euro it was worth 0.4788 from 0.4748, and 69.92 yen from 69.36. The TWI was at 61.23 from 60.46.
Meanwhile, the US dollar was under pressure for other reasons, after first quarter growth data showed inflationary pressures were benign.
Against the euro, it slipped to US1.2714 (US1.2543) and to 114.84 against the yen (116.51).
"At this stage, people are just sitting around waiting to see what the US dollar is going to do," Ms Hampton said.
Reuters currency rates:
5pm today 5pm Thursday
NZ dlr/US dlr US60.88c US59.52c
NZ dlr/Aust dlr A82.14c A81.74c
NZ dlr/euro 0.4788 0.4748
NZ dlr/yen 69.92 69.36
NZ dlr/stg 0.3320 0.3277
NZ TWI 61.23 60.46
Australian dollar US74.12c US72.86c
Euro/US dollar US1.2714 US1.2543
US dollar/yen 114.84 116.51
- NZPA
<i>Currency:</i> Kiwi finds wings on disappointing US rate hike
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