The New Zealand dollar sprang back to life yesterday after a chilly overnight dip.
At 5pm yesterday, it was at 44.62USc, up from 44.16USc around 9am. Salvation came from its favourite trading partner of late, the Australian dollar.
"The aussie carried on going up and started dragging the kiwi up with it," a currency dealer said.
The Australian dollar rallied to 55.75USc yesterday, from 55.27USc on Monday night.
The dealer said the local market had gained much of its momentum from traders, who appeared to be playing catch-up after a period of overselling.
"People were essentially just squaring back positions, and it started getting away from them so they have just been chasing their tails."
The big news on the local front this week will be today's December consumer price index.
Deutsche Bank's Daniel Swasbrook said he expected the CPI to have no effect on the dollar if the it fulfils expectations of 0.8 per cent for the quarter, or 3.7 per cent inflation for the year.
"If it's higher, the currency will probably do a bit better because the Reserve Bank will tighten rates."
- NZPA
<i>Currency:</i> Kiwi recovers from big chill
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