The New Zealand dollar had an optimistic tone yesterday despite remaining below US46c.
At 5pm the kiwi closed near its highs for the day, at US45.72c, up from Wednesday night's close of US45.60c, while the aussie was at US53.65c from Wednesday's US53.02c.
One local dealer said the kiwi had a bid tone and players were likely to buy it when it dipped, expecting it to rise again.
The kiwi's range during the day was US45.48/75c, and was likely to trade overnight between US45.50/90c.
"It's not looking too bad. It's mainly an aussie story again ... they've both backed off their highs at the moment but are still looking like they'll head higher," he said.
"The aussie feels like it's going to head higher, the euro looks like it's going to head higher, the kiwi will get dragged up on those.
"I think any dips are fairly well supported, the aussie looked pretty shocking after their employment data came out and the kiwi managed to hold in there quite well."
Compared with New Zealand's official unemployment statistics yesterday, which showed the unemployment rate fell to a 14-year low of 5.1 per cent, Australian employment posted a surprise fall in July.
In offshore trade the US dollar was unable to take advantage of another rise in US share prices, with the Dow Jones industrial average ending more than 2 per cent higher and the Nasdaq composite up 1.7 per cent.
For months, the greenback moved in line with Wall Street, but that relationship appears to have changed with US investors repatriating overseas funds to cover losses in domestic shares.
On the crosses at 5pm the kiwi rose to A85.21c (A84.85c at Wednesday's close), 54.94 yen (54.38), 29.69 pence (29.21), 0.6838 Swiss francs (0.6779), and 0.4688 euro (0.4646).
The aussie was trading at $NZ1.1736 ($NZ1.1777).
On the money market, 90-day bills were at 5.86 per cent (5.88), the trade-weighted index was at 52.62 (52.02) and the monetary conditions index was at minus 522 (minus 579).
On the debt market, the April 2004 bonds were at 5.54 per cent (5.57), the November 2006 bonds were at 6.00 per cent (6.04), and the November 2011 bonds were at 6.28 per cent (6.31).
- NZPA
<i>Currency:</i> Kiwi gains ground, tipped to head higher
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