Demand saw the New Zealand dollar strengthen against major currencies today.
At 5pm, the NZ dollar was buying US64.00c from US63.55c at yesterday's close. Against the aussie, the kiwi climbed to A85.02c from A84.54c while the trade-weighted index rose to 64.35 from 63.87.
BNZ currency strategist Danica Hampton said persistent buying from a US investment bank had underpinned the kiwi.
"There was some speculation the US demand was related to M&A flows, but there was little evidence to support these rumours," he said.
Demand for kiwi against the aussie and yen provided additional support.
The aussie was undercut by weakness in commodity prices, particularly the price of gold.
"Any sharp decline in commodity prices is likely to weigh more heavily on the AUD, and there is a risk that a break down in the AUD/USD (through support at US75c, and US74.70c) will support the NZD and trigger a NZD/AUD bounce towards US85.55c," she said.
She said the kiwi still had a bearish tone against the US unit and rallies would be sold into ahead of the Reserve Bank's quarterly review of monetary conditions on Thursday.
ANZ bank said local demand for the kiwi should see it cushioned on any fall, while upward pressure against the aussie was likely with further falls in the gold price expected.
The US dollar was hovering near a two-month high against the yen with the Japanese currency weighed by weak capital spending data that raised more doubts about another Bank of Japan rate increase this year.
The yen tumbled across the board after machinery orders posted their biggest monthly drop in nearly 20 years in July, the latest piece of soft economic data to stoke expectations that the BOJ won't raise rates any time soon.
As a result, Japanese investors will likely continue to seek higher yields in foreign currencies and bonds and shy away from the ultra-low yielding yen with short-term rates at 0.25 per cent.
The following are Reuters currency rates:
5pm today 5pm Monday
NZ dlr/US dlr US64.00 US63.55c
NZ dlr/Aust dlr A85.02c A84.54c
NZ dlr/euro 0.5032 0.5008
NZ dlr/yen 75.24 74.24
NZ dlr/stg 34.24p 34.05p
NZ TWI 64.35 63.87
Australian dollar US75.24c US75.25c
Euro/US dollar 1.2719 1.2687
US dollar/yen 117.54 116.86
- NZPA
<i>Currency:</i> NZ dollar rises to US64c
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