KEY POINTS:
The New Zealand dollar has staged its biggest one-day rise in nine years after a sharper than expected interest rate cut in the United States.
The New Zealand dollar has risen US3c in the last 24 hours, from a low of just above US70c yesterday to close at US73.12c today.
Westpac market strategiest Michael Gordon said the Federal Reserve's decision to cut its key interest rate by half a percentage point to 4.75 per cent had restored the appetite for risk.
"It's being read as a sign that the Fed is actively trying to get on top of the recent concerns about sub-prime mortgages and tight credit markets," he said.
"Equities around the world have had a pretty good day, high yielding currencies have done well and the New Zealand dollar has been the main beneficiary of that."
The kiwi outstripped its Aussie counterpart, with the cross closing at A85.73 compared to yesterday's A84.59c.
But the Australian dollar still strengthened in sympathy, rising to US85.29c (US83.14c yesterday).
Dealers expected the kiwi dollar would head higher overnight as it made up for a recent sluggish performance.
Against its other trading partners, it rose to 0.5230 euro (0.5075 euro), 84.71 yen (80.85 yen), 36.31p ( 35.36p) and the trade weighted index rose to 69.52 (67.32).
Meanwhile, the US dollar slid to a 15-year low against a basket of currencies as investors remained cautious about the subprime crisis.
The greenback's trade-weighted index slipped to 79.168, its lowest since 1992, then edged up to 79.187.
Reuters currency rates 5pm today 5pm yesterday
NZ dlr/US dlr US73.12c US70.33c
NZ dlr/Aust dlr A85.73 A84.59c
NZ dlr/euro 0.5230 0.5075
NZ dlr/yen 84.71 80.85
NZ dlr/stg 36.31p 35.36p
NZ TWI 69.52 67.32
Australian dollar US85.29c US83.14c
Euro/US dollar 1.3980 1.3862
US dollar/yen 115.84 114.94
- REUTERS