KEY POINTS:
The New Zealand dollar recovered almost all of the half a US cent lost on rumours today of Reserve Bank intervention for a second time.
The central bank refused to comment about whether it had acted to bring the kiwi lower. It had issued a statement accompanying its intervention a week earlier.
However, market participants backed up rumours of such a move after the kiwi hit a high around US75.50c.
"Those rumours knocked the currency from the US75.45c area down towards the figure, (75.00c) but I think it's also important to recognise that at the moment the global backdrop continues to be quite supportive for the kiwi," Bank of New Zealand chief currency dealer Mike Symonds said.
By 5.15pm, the kiwi was at US75.47c, up from Friday's late afternoon level of US75.25c but virtually unchanged from early this morning. Against the Australian dollar, the kiwi was at A89.59c against Friday's A89.89c but steady against this morning's level.
The Reserve Bank's key indicator, the trade weighted index, was at 73.61 from Friday's 73.58.
The prospect of Japanese interest rates remaining on hold for the foreseeable future, and benign US consumer inflation, strong commodity prices and very strong appetite for carry trades -- which flow from low-yielding currencies such as the yen into the NZ dollar -- also favoured the kiwi.
Against the yen, the kiwi was at 93.25 from Friday's level of 92.58 yen.
"On Friday evening, all those strong supportive factors which have helped guide the kiwi higher in recent months were again to the fore. So the kiwi dollar has held up pretty well despite the obvious rumours about central bank action," Mr Symonds said.
He expected the kiwi to remain stuck within a broader range of US74.50c to US76.50c, until global investor sentiment changed or domestic data became consistently weaker.
"The spectre of possible RBNZ intervention will continue to weigh on the kiwi -- I don't expect to see the kiwi outperform relative to other currencies."
Among other currencies to scale recent highs, the euro rose to a record against the yen.
Reuters currency rates:
5.15pm today 4.30pm Friday
NZ dlr/US dlr US75.47c US75.25c
NZ dlr/Aust dlr A89.59c A89.89c
NZ dlr/euro 0.5636 0.5647
NZ dlr/yen 93.25 92.58
NZ dlr/stg 38.15p 38.20p
NZ TWI 73.61 73.58
Australian dollar US84.23c US83.72c
Euro/US dollar 1.3393 1.3322
US dollar/yen 123.57 123.02
- NZPA