Overnight demand and weakness in the United States dollar helped lift the New Zealand currency today.
Dealers said it was a hands off day and markets were awaiting key US inflation data.
The kiwi ended on US62.75c from US62.20c at yesterday's close and the trade weighted index finished at 61.82 from 61.52 yesterday evening. Against the Australian dollar, the kiwi firmed to A81.64c from A81.52c.
Comments reported yesterday by Reserve Bank Governor Alan Bollard that he was not uncomfortable with the New Zealand dollar's fall held the kiwi down only briefly.
Dealers don't expect tomorrow's budget to have any affect on the kiwi.
"Now that the Telecom announcement's out, there's nothing left," said an Auckland dealer.
Major markets focused on the yen's strength.
The euro hit a seven-week low against the yen after a top European Central Bank official echoed a call made by the Group of Seven economic powers last month for Asian currencies to rise.
The US dollar edged towards an eight-month low versus the Japanese currency after tame inflation and housing figures provided yet another signal the Federal Reserve may soon end a two-year run of raising interest rates.
The euro came under pressure against the yen a day after ECB Governing Council member Christian Noyer told Reuters that more currency flexibility was desirable in Asia.
Noyer's comments, seen by some in the market as an effort to shift the focus of the dollar's recent weakness away from the euro, prompted Japanese investors to liquidate long positions in the euro against the yen, traders said.
The Australian dollar ended on US76.89c from US76.32c yesterday.
5pm today 5pm Tuesday
NZ dlr US62.75c US62.20c
NZ dlr/Aust dlr A81.64c A81.52c
NZ dlr/euro 0.4876 0.4850
NZ dlr/yen 68.71 68.52
NZ dlr/stg 33.18 33.02
NZ TWI 61.82 61.52
Australian dollar US76.89c US76.32c
Euro/US dollar US1.2872 US1.2819
US dollar/yen 109.50 110.14
- NZPA
<i>Currency:</i> Kiwi strengthens on US dollar
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