KEY POINTS:
The New Zealand dollar traded in a narrow range today, the first day of trading since the Christmas break, but finished on a high note.
At 5pm the kiwi was at the high end of its day's trading at US76.78, up slightly on the start of the day, when it rose to US76.74c, from US76.37c on Monday.
The currency traded today between US76.73c and US76.78c.
Against the aussie, the kiwi was buying A87.54c from A88.40c on Monday.
But it also reached one of its highest levels against the Japanese yen in two weeks, 87.84, dropping back to 87.76 at the end of the day.
Some commentators said the improvement in the kiwi was on the back of concerns America's continuing housing slump will lead to another cut in US interest rates, making New Zealand's investments look more attractive.
New Zealand's dollar has risen 9 per cent since the US Federal Reserve first cut its target rate this year on September 18. Today's rise in the value of the kiwi was seen as being driven by perceptions of continued weakening in the US dollar.
Overnight, the US dollar slid against a basket of major currencies in thin trade while the yen traded near seven-week lows as investors continued to fund carry trades by borrowing the Japanese currency.
Carry trades, in which investors use a low-yielding currency to fund investment in high yielders, favour the New Zealand dollar and others such as the Australian dollar, but are unpopular when the environment is seen as increasingly risky.
- NZPA