The New Zealand dollar topped 40USc yesterday and looked set to rise off recent lows.
One currency dealer said it was a key day for the kiwi and he did not expect it to set a new low again in the medium term.
"More than just a nice solid up-day, I think we can say that in place we have a medium-term low for the New Zealand dollar. I don't think it's going to make a new low for some time," he said.
"It was a significant volume day which is often quite key - the talk is the last lot from 39.80c to 40.17c was in the vicinity of $300 million from offshore, which is pretty solid."
Trading earlier in the day had been locally driven but once the kiwi started climbing investors who followed trends and longer-term hedge funds began buying.
The kiwi had been buffeted by rumours Standard & Poor's was about to downgrade New Zealand but the rumours were subsequently denied, aiding the recovery.
The Australian dollar tumbled to a low of 51.59USc on Thursday but gained almost one US cent in trading yesterday as some positive sentiment returned to the market.
In a news conference following a regularly scheduled meeting of the European Central Bank, its president, Wim Duisenberg, declined to elaborate on comments he made earlier this week, which appeared to play down chances of further central bank action.
- NZPA
<i>Currency</i>: Kiwi hits 40USc on big volume
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