KEY POINTS:
The New Zealand dollar eased from its post-float high above US78c, but was still finding plenty of support from investors seeking exposure to the country's high interest rates.
The kiwi was higher against all the major currencies. By 5pm, it was at US78.12c, more than half a US cent higher than the same time yesterday, but below its US78.35c overnight high.
Against the aussie, it rose to A91.23c from yesterday's A91.04c.
The trade weighted index also surged ahead, to 75.42 from 75.11. It peaked at a post-float high of 75.56.
"US interest rate yields have been falling in the last few days, and that differential between the US yields and many other countries has been widening, so there's been demand to sell US dollars . . ." said HSBC Auckland-based treasurer Trevor Pye.
The kiwi was sold down this morning below US78c where it met with strong demand again. The currency is supported around US77.85c.
"Once again we seem to be at the mercy of the high yields in New Zealand and the weaker US dollar and that's continuing to underpin the currency and push us higher," Mr Pye said.
"The technical picture, though, is getting a little bit extended and when it does move this quickly there's always a chance you can see some sort of dramatic pullback."
The US dollar matched a 26-year low versus sterling and hung near a record trough against the euro on expectations that official US interest rates will hold steady.
Traders also sold the dollar ahead of a US national holiday on concerns that the United States may be a terrorism target following an attack on Glasgow airport and foiled attempts to detonate car bombs in London.
ANZ said that while a large amount of risk aversion was negative for the kiwi, a small amount generally was not, as the NZ dollar was seen as a safe haven and riding on the back of a stronger euro and aussie.
Rates:
5pm today 5pm yesterday
NZ dlr/US dlr US78.12c US77.54c
NZ dlr/Aust dlr A91.23c A91.04c
NZ dlr/euro 0.5735 0.5728
NZ dlr/yen 95.59 95.34
NZ dlr/stg 38.73p 38.59p
NZ TWI 75.42 75.11
Australian dollar US85.63c US85.18c
Euro/US dollar 1.3621 1.3534
US dollar/yen 122.37 123.01
- NZPA