KEY POINTS:
The New Zealand dollar was trawling around the US71c level today after briefly topping US71.50c in a fresh 15-month high against the greenback early on Saturday,
By 5pm the kiwi was at US71.03c from US71.13c at 8am, and the US71.06c late on Friday.
BNZ said buying from a custodial fund had pushed the currency up but its strength had proved unsustainable.
"It is worth noting, much of the recent New Zealand dollar demand has been from more short-term speculative type accounts," BNZ said.
It predicts the currency will have a hard time making headway above US71.50c, a view that ANZ agreed with.
A range of local data this week will focus investors on economic fundamentals. If GDP is strong, interest rates are likely to remain high, which means demand for the currency will continue.
December quarter balance of payments figures are due on Thursday, and December quarter gross domestic product figures on Friday.
Against the Australian dollar, the kiwi was trading at A88.28c by 5pm from A88.17c on Friday afternoon.
It was also buying 0.5352 euro from 0.5330, and 83.75 yen from 83.90. The trade weighted index was at 69.55 from 69.48.
The ANZ bank today said higher yields were continuing to improve the fortunes of the NZ dollar, with many investors looking for further rises next month.
But, it added, "if geopolitical tensions escalate and trigger another bout of risk aversion and increased volatility, yield alone will not be enough for the NZD".
The US dollar firmed against the euro in last week's final session as a surprise jump in US existing-home sales tempered the case for lower benchmark interest rates by the middle of the year.
The greenback also recovered losses against the yen sustained earlier when data showed the first annual rise in Japanese land prices in 16 years.
Reuters currency rates:
5pm today 4.30pm Friday
NZ dlr/US dlr US71.03c US71.06c
NZ dlr/Aust dlr A88.28c A88.17c
NZ dlr/euro 0.5352 0.5330
NZ dlr/yen 83.75 83.90
NZ dlr/stg 36.22p 36.18p
NZ TWI 69.55 69.48
Australian dollar US80.46c US80.53c
Euro/US dollar 1.3276 1.3324
US dollar/yen 117.88 118.14
- NZPA