By ELLEN READ
The New Zealand dollar is rebounding, thanks in part to souring sentiment towards the greenback.
The kiwi reached a high of 43.81USc on Friday (London time), its highest for more than five months, and currency dealers believe there is more strength to come.
The high for the year of just over 45USc is seen as the target for the coming couple of months. If the kiwi breaks that level, then it could continue to 48USc over the next six to nine months.
Dealers said volumes had been steady if a little patchy, but that was not surprising given that the Northern Hemisphere is on its summer break.
The main factor driving up the kiwi is expected to be continued weakness of the US dollar, but hedging demand - as New Zealand moves into its agricultural exporting season later in the year - will help boost the local currency.
Last week's Reserve Bank monetary policy statement - which emphasised that interest rate and growth rate differentials would continue to move in New Zealand's favour - should also support the kiwi.
Bank of New Zealand currency strategist Stu Ritson said the US dollar had been resilient for some time and "people are just starting to reassess their perceptions towards the US economy and to test the resilience of the strong dollar policy". He said the momentum in the market could snowball.
The kiwi has not risen in isolation over recent days - other currencies, including the Australian dollar, the yen and the euro have also gained - but it has done particularly well.
Kiwi spreads its wings as the greenback falters
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