The New Zealand dollar made some ground along with the Australian dollar yesterday, hitting its highest level since September 11.
One local dealer said the kiwi had had a good day and was likely to trade higher during the weekend.
"Obviously most of the gains were overnight. We've seen a range of US43.07/24c today. The majority of that strength has come on the back of a stronger euro which has flowed through to a stronger aussie, which has flowed through to a stronger kiwi," he said.
"We have benefited and there does seem to be a slightly stronger feel about (kiwi) at the moment, we've seen it supported throughout the day."
He picked the Reserve Bank to leave the Official Cash Rate unchanged in its Monetary Policy Statement, although the kiwi was unlikely to be affected long term if the bank raised rates as some expected.
The Reserve Bank meets next week and on April 17 to review the country's official cash rate, which is currently at 4.75 per cent.
"It's hard to see a major reaction if there is a change ... we're not interest-rate driven at this stage, and if the rest of the world's holding off that may be seen as a negative but also with higher interest rates people may see that as a positive as well. Probably the market's expecting (no change) with the danger being to a slight rise."
Across the Tasman there has been speculation that the Reserve Bank of Australia would raise rates at its meeting next month.
In overnight trade the greenback was left smarting from broad-based losses overnight, led by its fall against the Swiss franc. The Swiss franc drew safe-haven favour on growing unease the United States might broaden its campaign against extremists to include Iraq.
The kiwi was likely to find support at US43.10c during the weekend, with a small rally possible to US43.40c, the dealer said.
At 5pm the kiwi was at US43.31c, up from US42.88c at Thursday's close, while the aussie was at US52.35c (US51.98c).
On the crosses at 5pm the kiwi was buying A82.54c (A82.49c at Thursday's close), 55.81 yen (55.25), 30.39 pence (30.27), 0.7150 Swiss francs (0.7176), and 0.4891 euro (0.4887).
The aussie was at $NZ1.2118 ($NZ1.2123 at Thursday's close).
The trade weighted index was at 52.02 (51.76), the monetary conditions index was at minus 638 (minus 664), and 90-day bank bills were at 5.27 per cent (5.26).
On the debt market the April 2004 bonds were at 6.08 per cent (5.99), the November 2006s were at 6.71 per cent (6.63), and the November 2011s were at 6.95 per cent (6.87).
- NZPA
<i>Currency:</i> Kiwi hits six month high
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