After hitting a three month high overnight, the New Zealand dollar paused for a rest ahead of Labour Day weekend.
"It's been deadly," said Stu Ritson, currency strategist at BNZ, about the day's tight seven-point range.
By 5pm the kiwi was at US48.53c, up from Thursday's close of US48.46c, and the aussie also gained ground, to US55.52c (US55.36c).
Overnight the kiwi ground higher to US48.74c, a level not seen since mid-July, buoyed by the strong aussie dollar.
Dealers suggested the kiwi could push higher again tonight as far as US48.80c with support at US48.20/30c, but the key was US equities.
"The aussie and the kiwi have been boosted recently by improved investor risk appetite and a lot of that's driven by the rise in equity prices so that's where people will be focusing, I think," BNZ currency strategist Stu Ritson said.
He said the tone was still positive but suspected there was a bit of end-of-week position unwinding taking place.
"The tone seen in recent days suggests that dips are buyer opportunities and should push up to that US48.80/90c region for the start of next week."
Mr Ritson said the global economic outlook remained subdued and uncertain, but while markets price improved outcomes, the Australasian currencies was expected to remain well supported.
During the past two weeks the kiwi achieved a 1.6 per cent return, the aussie offered 1.2 per cent, and the South African rand yielded a 2.7 per cent return.
Overseas, the greenback fell on Thursday, suffering under the weight of falling US stock prices while the yen hewed to narrow ranges as dealers took to the sidelines amid deep uncertainty over Japan's long-delayed banking reform.
The yen retreated from four-month lows versus the dollar and a three-year nadir against the euro, as investors' fears waned that Japanese political opposition would derail bank reforms, seen as critical to a Japanese economic recovery.
In Wellington at 5pm the US dollar traded at 123.81 yen, compared with Thursday's 124.08 yen, while the euro was at US97.88c (US97.75c).
On local crosses the kiwi was edged up to A87.58c (A87.54c at Thursday's close), 0.4967 euro (0.4964), 60.21 yen (60.13), 0.3126 pence (0.3129), and 0.7290 Swiss francs (0.7285).
The Australian dollar was down at $1.1418 ($1.1423).
The 90-day bill yield was flat at 5.91 per cent, the New Zealand dollar trade-weighted index at 55.88 (55.80), and the monetary conditions index tightened to minus 218 (minus 225).
The April 2004 bonds eased to 5.72 per cent (5.75), as did the November 2006s, to 6.11 per cent (6.15), and the November 2011s to 6.42 per cent (6.46).
- NZPA
<i>Currency:</i> Kiwi rests up as it stands poised for another leap
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