KEY POINTS:
The New Zealand dollar was back hovering around US75c when the local market opened at 8am today, having dipped below US74.60c overnight.
The ANZ bank today said demand from Asian investors looked to have provided a base of support for the kiwi.
April retail sales data to be released today was shaping up as a bit of a test for whether the strength could be maintained, ANZ said.
Shortly after 8am today the NZ dollar was buying US75.11c, compared to US75.02c at 5pm yesterday.
ANZ said the strength of the kiwi was somewhat surprising given traditional sell factors, such as higher US yields, falling risk appetites and increased volatility.
Those all suggested the NZ dollar should have faced some strong headwinds.
The kiwi opened today stronger against the yen, from 91.70 at 5pm yesterday to 92.20 soon after 8am today.
Against the Australian dollar it was at A89.43c this morning from A89.24c, while the euro was at 0.5644 from 0.5638 yesterday evening. The trade weighted index was at 73.37 from 73.21.
ANZ said positioning of offshore participants looking for a large and sustained fall in the kiwi cross against the aussie was currently preventing it taking place.
The US dollar rallied to a 4-1/2-year high against the yen overnight, helped by data indicating US retail sales growth in May was the highest since January 2006, which many investors took as a sign of a pickup in US economic growth.
Limiting the greenback's gains was a dip in the US 10-year Treasury yield which fell from five-year highs even as more investors seem willing to bet that the Federal Reserve's next move could be a hike in interest rates.
- NZPA