KEY POINTS:
The New Zealand dollar was pushed around today after the Reserve Bank raised interest rates, as expected, but failed to say a further rise may be necessary.
By 5pm, the kiwi was at US74.81c, up from US74.13c late on Tuesday.
Against the Australian dollar, the kiwi was at A89.72c from A89.80c on Tuesday afternoon.
One dealer said the kiwi traded between US74.20c and US74.81c, having hit both its session high and low after the Reserve Bank decision this morning.
"Everybody expected the Reserve Bank to pull the trigger, in terms of the interest rate market and the overall foreign exchange market... it was 75 per cent saying they were going to go," he said.
The ANZ was bearish on the US dollar, whose weakness would be one of the drivers behind the kiwi sustaining a breaking through the US74.80c level, its high over the last couple of days.
"(Kiwi)'s going into London tonight on its highs, which is a bit of a worry but if the US dollar remains weak in Europe then the kiwi will probably break that US74.80/85c area."
Reserve Bank comments after its 25 point interest rate hike to 7.75 per cent were seen as trying to dampen down risks that the higher Official Cash Rate will boost the exchange rate, which is wreaking havoc on exporters.
The bank described the New Zealand dollar exchange rates as "exceptional by historical standards" and "unjustified on the basis of medium term fundamentals".
Those comments meet two of the criteria used by the Reserve Bank to decide whether to intervene in foreign exchange markets, although economists did not seem to be expecting any imminent intervention.
Also today, the National Bank's monthly business survey showed a decline in confidence about the wider business sector, but a steady view about companies' own outlook.
That was consistent with economic growth of about 2.5 per cent, the bank said.
The US dollar remained within sight of its record low against the euro as it struggled in the wake of mixed US data that did little to allay market concerns about a slowdown in the US economy.
In contrast, euro zone data showed German business sentiment surged close to a record high in April.
- NZPA