The New Zealand dollar today rowed back from a six-month high against the US currency touched in overnight trading.
It raced up in reaction to yesterday's tough anti-inflation talk from Reserve Bank governor Alan Bollard yesterday.
It charged through the US66c level to peak around US66.50c in overnight trading but profit-taking saw it close at US66.00c.
That was still up nearly half a cent from yesterday evening's close of US65.53 and nearly US2c up from Wednesday evening.
The kiwi was also riding high against other currencies, being worth A87.33c from A87.16c yesterday evening, 0.5185 euro from 0.5163, and 77.50 yen from 77.03. The trade weighted index was at 66.24 from 65.93.
Yesterday, Dr Bollard left the Official Cash Rate (OCR) unchanged at 7.25 per cent in his quarterly review of monetary conditions but he threatened more rate hikes after having ruled that out in March.
BNZ currency strategist Danica Hampton said Dr Bollard had surprised the market with the forcefulness his commentary.
The Reserve Bank had also raised its 90-day bank bill forecast to 7.6 per cent in the fourth quarter, a track consistent with a strong chance of another OCR hike to 7.5 per cent in the coming months, she said.
ANZ said the NZ dollar's move came "after what can be described only as an unveiled threat from the RBNZ that the focus will be on inflation only".
The US dollar was steady against the yen and the euro as investors kept positions light ahead of key US inflation data and a meeting of the Group of Seven finance ministers and central bankers.
The dollar erased some losses against the euro after stronger-than-expected US retail sales data raised doubts about the degree to which growth was slowing.
Reuters currency rates:
5pm today 5pm Thursday
NZ dlr/US dlr US66.00c US65.53c
NZ dlr/Aust dlr A87.33c A87.16c
NZ dlr/euro 0.5185 0.5163
NZ dlr/yen 77.50 77.03
NZ dlr/stg 35.06p 34.93p
NZ TWI 66.24 65.93
Australian dollar US75.56c US75.16c
Euro/US dollar 1.2725 1.2689
US dollar/yen 117.45 117.54
- NZPA
<i>Currency:</i> NZ dollar rows back from six month high
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