The New Zealand dollar rose more than 1-1/2c overnight against the greenback, which was heavily sold off.
From a low around US62.55c yesterday evening, the kiwi peaked around US64.15c about 5am before easing to US64.02c by 8am today.
In its morning briefing, ANZ bank said the US dollar also fell sharply against the Australian dollar and the euro, as well as against the kiwi.
The key driver was hard to pin down, illustrating the fickle nature of markets, particularly currency markets, at present.
A policy announcement due tomorrow morning (NZ time) from the Federal Reserve's policy-setting federal open market committee was the bellwether event of the week, ANZ said.
It was looked towards as the next key direction gauge for currencies.
No move on US interest rates is expected, but investors will focus on what the Fed says about the economic outlook amid speculation it may lower expectations of an interest rate rise.
ANZ said New Zealand March quarter balance of payments statistics due out tomorrow and gross domestic product figures on Friday appeared well off the radar, as US dollar moves dominated.
The NZ dollar rose against a range of currencies overnight, buying 0.4549 euro at 8am from 0.4529 at 5pm yesterday, and rising to 60.97 yen from 59.79.
Against the Australian dollar, the kiwi was up to A80.54c from A80.11c, while the trade weighted index rose to 60.44 at 8am from 59.74 at 5pm.
- NZPA
<i>Currency:</i> NZ dollar back in US64c range
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