KEY POINTS:
The New Zealand dollar continued strengthening during the night after surviving a test of support early yesterday.
By 8am today the kiwi was buying US76.51c, having recovered from a drop below US75.55c around 10am yesterday.
The ANZ Bank today said support for the NZ dollar only briefly gave way at US75.70c as heavy demand entered the market.
From there the kiwi never looked back, spending the remainder of the local day and the offshore session being steadily bought, ANZ said.
All eyes were now on the Federal Reserve's US interest rate decision on Wednesday morning NZT.
ANZ was confident the Fed would leave US rates unchanged, saying the market was looking for any change in the tone of its comments.
The NZ dollar looked set to trade off US equities again, with an overnight rally in the US providing support for the kiwi, ANZ said.
Against the Australian dollar and the euro, the NZ dollar hit fresh two month lows before its recovery.
From below 0.5470 euro about 10am yesterday, the kiwi climbed to 0.5552 by 8am today.
Against the aussie, the NZ dollar spent several hours bumping along the bottom, getting under A88.60c around 4.30pm before starting its climb. By 8am it was at A89.13c.
Against the yen the kiwi moved from around 88.60 about 10am yesterday to be at 91.11 by 8am today.
The trade weighted index was 73.23 at 8am today from 72.64 at 5pm yesterday.
Overnight the greenback hit a 15-year low against a basket of major currencies as traders speculated that woes in the US credit market would prompt the Federal Reserve to cut interest rates.
The yen also fell broadly overnight as the US stock market extended gains and benchmark Treasury yields rose.
- NZPA