The New Zealand dollar had a positive tone yesterday and looked settled in a new range above US43.00c.
At 5pm, the kiwi traded at US43.04c, more than half a US cent higher than Wednesday night's close of US42.43, while the aussie was at US52.38c from US51.94c yesterday.
Bancorp Treasury Services director Jon Clarke said the kiwi was underpinned partly by positive economic news from Australia, and optimistic comments from New Zealand Finance Minister Michael Cullen, who said New Zealand's economic indicators were the strongest since the mid-1960s.
However, a gradual move from the greenback into other currencies as the result of a positive economic outlook in the US, perversely weakening the US dollar, was also at play in the kiwi's rise recently.
"It is the very fact that the US recovery has meant that the outlook for the rest of the globe has improved," Mr Clarke said.
"...If the US economy is going to grow by up to 4 per cent by year-end, (fund managers) are of the view that the rest of the globe is going to recover as well, and in that scenario it is safe to move away from the security of the US market.
"It's the good news in America that's perversely weakening the US dollar because of the shift in portfolios, enabling the other currencies to pick up."
Tokyo's main stock index has leapt more than 10 per cent in the past week, outperforming its peers and leaving fund managers wondering whether they can afford to maintain underweight exposure to Japan in the run-up to the country's fiscal year end.
The kiwi was likely to be capped by its year high overnight of US43.23c, but there was scope for it move higher depending on key US unemployment data out late today.
On the crosses at 5pm, the kiwi rose to its highest level since January 29 at A82.16c (A81.69c at Wednesday's close), while the aussie slumped to $NZ1.2176 ($NZ1.2231).
With the exception of the yen, the kiwi gained against most major currencies, buying 56.15 yen (56.21), 30.22 pence (29.84), 0.7230 Swiss francs (0.7199), and 0.4904 euro (0.4877).
The trade weighted index was at 52.04 (51.58), the monetary conditions index eased to minus 650 (minus 695), and 90-day bank bills were at 5.14 per cent (5.11).
On the debt market, the March 2002 bonds were at 4.71 per cent (4.63), the April 2004 bonds were at 5.88 per cent (5.82), the November 2006s were at 6.53 per cent (6.45), and the November 2011s were at 6.81 per cent (6.72).
- NZPA
<i>Currency:</i> Kiwi storms out of gate as US dollar falls behind
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