The New Zealand dollar looked up slightly yesterday, gaining more than half a cent on Thursday's all-time low.
The kiwi closed at 43.54USc, from 42.89USc.
BNZ forex manager Greg Ball said the market was still thin, meaning small volumes could shift the currency around a lot.
"We could possibly see a 40USc kiwi, as an all-time low, by the end of the year," Mr Ball said, adding a move below that was unlikely.
The kiwi also picked up against most other major currencies.
That meant the trade weighted index, which measures the kiwi against the currencies of its major trading partners, bounced back from 48.66 on Thursday to 49.47.
On the cross rates the kiwi was at A76.10c (A74.78c), having gone as low as A74.24c in the past day.
ANZ Bank said higher prices for imported resources and consumer goods - made more expensive by the cheap dollar - meant interest rates were increasingly likely to rise.
Last week the Reserve Bank decided not to increase the benchmark official cash rate, currently at 6.50 per cent, a recognition of fragile economic growth. A rate increase makes borrowing more expensive for householders and businesses so the economy slows as the flow of money reduces.
Ninety-day bill yields were steady at 6.69 per cent, and the monetary conditions index tightened to minus 747 (minus 830).
- NZPA
<i>Currency:</i> Weak dollar causes rate fears
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