The New Zealand and Australian dollars continued to hold steady at recent highs although they retreated a little from overnight levels.
By 5pm the kiwi was trading at US46.71c, compared with a close of US46.58c Monday night, while the aussie was US55.50c, well up on Monday's close of US55.17c.
Some interest from Asian traders yesterday buoyed the kiwi, which traded between US46.56/77c, one local dealer said.
"It was very much bid ... the yield-chasing demand is out there and underpinning it.
"I don't know that necessarily there's good volume going through, but I think we're getting to a place where the market's quite bullish, there seems to be a dearth of selling," he said.
"It's quite comfortably sitting there to be honest and the top side certainly seems to be the more threatening of the two."
Monday night's 23-month high of US46.78c was unbroken yesterday but the kiwi may have a look up to US47c overnight, while it was supported about US46.50/60c, he said.
In offshore trade, the greenback set multi-month lows as investors questioned the pace of US economic recovery and took heed of government warnings of potentially more deadly attacks against the United States. Much of Europe and Canada was on holiday.
The US Conference Board's index, which projects developments in the economy over the next half year, slid 0.4 per cent in April, the first drop since September. All three major US stock indexes extended losses after the figures were released, choking demand for dollars.
US consumer spending, which accounts for two-thirds of the economy, may slide further following Vice President Dick Cheney's comments that another attack was "almost a certainty".
On the crosses at 5pm, the kiwi was buying A84.17c (A84.44c at Monday's close), 0.5087 euro (0.5061), 58.83 yen (58.60), 32.06 pence (31.86), and 0.7390 Swiss francs (0.7352).
The aussie was buying $NZ1.1881 ($NZ1.1843).
The monetary conditions index tightened to minus 314 (minus 327) and 90-day bank bills were steady at 5.86 per cent. The trade-weighted index remained at two-year highs of 54.78 (54.70).
On the debt market, the April 2004 bond yields were at 6.15 per cent (6.20 at Monday's close), the November 2006s were at 6.74 per cent (6.79), and the November 2011s were at 6.85 per cent (6.91).
- NZPA
<i>Currency:</i> Kiwi holds steady at recent highs
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