Downbeat comments on the American economy by Federal Reserve chairman Alan Greenspan unleashed the New Zealand dollar, which shot almost a cent higher by the close yesterday.
The kiwi finished at 41.45USc, driven up as the euro and aussie gained in the face of rare greenback weakness.
Mr Greenspan said the US economy was not out of the woods yet, and further interest rate cuts might be in the pipeline.
The key US interest rate is at 3.75 per cent, against New Zealand's 5.75 per cent. However, for international investors currency yield arguments these days come second to what low interest rates can do for struggling economies.
The greenback also took a hammering on speculation US President George W. Bush may revisit the strong dollar policy at this weekend's G8 meeting, HSBC's Peter Hunter said.
- NZPA
<i>Currency:</i> Unleashed kiwi bounds higher
AdvertisementAdvertise with NZME.