KEY POINTS:
The New Zealand dollar hit a near six-week high above US74.50c early today, as the greenback tumbled.
The US dollar reached a record low against the euro and reached parity with the Canadian currency for the first time in 31 years on expectations of more cuts in US interest rates after this week's sharp reduction.
Bank of New Zealand currency strategist Danica Hampton said the NZ dollar had rallied sharply, but then eased as commercial accounts came to the market.
By 8.30am today the kiwi was buying US73.64c, little different to the US73.55c it was buying at 5pm yesterday.
The rush of strength for currencies, including the NZ dollar, came as markets took heart from actions of the US Federal Reserve and the Bank of England, Ms Hampton said.
While their proactive moves had helped calm asset markets they had also given the market a belief that softer US monetary policy would dampen the appeal of the US dollar.
With risk aversion moderating in recent days, some improved risk appetite was underpinning investor sentiment, she said.
While that improved sentiment held sway the NZ dollar could be expected to challenge the US74.50c to US74.75c level.
The NZ dollar was down against other major currencies at 8.30am today from the levels of 5pm yesterday.
It was buying A85.49c from A85.62c against the aussie, and was at 0.5235 euro from 0.5266, and 84.35 yen from 85.28. The trade weighted index was 69.66 at 8.30am from 69.89.
Currency rates
8.30am today 5pm yesterday
NZ dlr/US dlr US73.64c US73.55c
NZ dlr/Aust dlr A85.49c A85.62c
NZ dlr/euro 0.5235 0.5266
NZ dlr/yen 84.35 85.28
NZ dlr/stg 36.66p 36.78p
NZ TWI 69.66 69.89
Australian dollar US86.12c US85.95c
Euro/US dollar 1.4063 1.3976
US dollar/yen 114.58 115.85
- REUTERS