KEY POINTS:
The New Zealand dollar today edged up over US73c but essentially remained rooted in its recent range.
It finished the session on US73.05c, having earlier traded down to US72.60c compared with yesterday's US72.82c close.
Bank of New Zealand currency strategist Danica Hampton said the kiwi was dragged higher overnight on the coat-tails of the Australian dollar, which was bought aggressively.
The Australian dollar climbed to US82.37c from yesterday's US81.85c close while the kiwi cross rate fell to A88.58c from A88.94c.
The kiwi rode out the 6.5 per cent slide in the Shanghai sharemarket yesterday with no ill effects.
As well, the National Bank's monthly survey out today showing business confidence slumped in May as the export and manufacturing sectors took a hammering, failed to have any appreciable effect.
A net 48 per cent of respondents to the bank's Business Outlook expected conditions to worsen -- the lowest reading since early 2006, and down 29 points on the previous month.
Ms Hampton said New Zealand interest rate markets had become increasingly hawkish over the past week and that was underpinning the kiwi.
Current market pricing was consistent with about a 75 per cent chance of the Reserve Bank hiking the Official Cash Rate to 8 per cent next week, she said.
At the start of the week, little more than a 50 per cent chance of a hike was priced in.
The trade-weighted index was at 71.27 from 71.12.
In the majors, the US dollar held near a seven-week high against the euro as investors awaited a slew of upcoming US data that could further cool expectations for the Federal Reserve to trim interest rates later in the year.
The dollar has clawed back from a record low hit against the euro in April and a 26-year low against the pound as worries about the economy's health have eased, reducing speculation of lower rates that would erode the US currency's yield appeal.
The euro was steady near US$1.3432 after falling to US$1.3406 the previous day, its weakest since mid-April.
- NZPA