The New Zealand dollar was mildly firmer yesterday in light pre-holiday trade.
Shortly after 5 pm it was at 42.63USc (42.41c at Friday's close).
With markets in both New York and London closed today for public holidays, flows were quieter than the usual sleepy Monday trade, dealers said.
"It [the kiwi] has just sort of ground up slightly, there has been a bit of small aussie/kiwi cross-related buying," one currency dealer said.
On the cross the kiwi closed at 81.93c from 81.32c at Friday's close.
The range for the day was a narrow 42.43USc to 42.63c, with the 43c mark proving hard for the kiwi to crack at the moment, the dealer said.
"It has still got a bit of work to do to grind up, it has got to break through that 43c barrier. It got up to 42.90USc last week and it looks like it might head up that way and have another look, but the euro is still quite weak."
The euro closed locally at 85.94USc and the Australian dollar was at 52.06USc (52.20c).
In the longer term, analysts predict the Australian, New Zealand and Canadian dollars will gain ground against the US dollar, with the interest rate gap likely to widen further in their favour.
US interest rates are now at 4 per cent - a seven-year low - well below New Zealand's official cash rate at 5.75 per cent and Reserve Bank Governor Don Brash has adopted a cautionary stance towards further rate cuts in the near term.
This means investors are beginning to show interest in getting higher rates of return outside of the US.
"Part of our view on why the Australian and New Zealand dollars will grind higher this year is based on rate differentials," James Shugg at Westpac in London said.
"Earlier this year rate cuts favoured currencies as they were seen as good for growth but now we are seeing signs of growth coming through and the emergence of a favourable rate gap."
Mr Shugg sees the Australian dollar rising to around 55USc in coming months and the kiwi firming to around 45USc.
- NZPA
<i>Currency:</i> Kiwi tipped to nudge 45USc
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