KEY POINTS:
The New Zealand dollar continued to regroup below near record levels seen this week after the United States dollar gained some strength overnight.
The kiwi was at US72.76c at 8am, having yesterday peaked at US73.13c, just US1.5c below its post-float high hit in March 2005.
It closed at US72.65c yesterday.
Overnight, currency markets were focused on the release of March Federal Reserve Open Market Committee (FOMC) minutes.
The minutes suggested that further interest rate rises may be needed in the US and that the Fed was willing to sacrifice growth to get inflation down.
This gave the US dollar a slight boost but ANZ said in its morning brief that markets are unconvinced of any sustained lift in the US dollar so further attempts on the topside looked on the cards for the New Zealand dollar.
Reuters reported that the New Zealand and Australian dollars hit decade highs against a slumping yen overnight after the International Monetary Fund (IMF) said it saw no need for "heavy-handed" action on the yen carry trade.
The IMF comments were taken as a green light to continue borrowing in yen to fund purchases of higher-yielding currencies like the New Zealand and Australian dollars.
Against the Japanese yen, the kiwi was at 86.81 yen by 8am this morning from the 86.62 yen at 5pm yesterday. Its high on April 11 was 87.12 yen, according to Reuters.
Against the aussie the New Zealand dollar was at A88.24c from the A88.14c close yesterday.
Australian dollar strength and the prospect of more interest rate rises in New Zealand, as suggested by the Quarterly Survey of Business Opinion (QSBO) this week, are underpinning the New Zealand dollar generally.
BNZ economists said this week that there was a 50:50 chance of two 25 basis point hikes in interest rates by June, which would put the official cash rate at 8 per cent.
For most of the overnight session the US dollar barely moved against the euro and crept higher against the yen ahead of the release of the FOMC minutes.
Sterling was up 0.3 per cent at $1.9782, boosted by a newspaper report that the Treasury may allow UK-based firms to repatriate their foreign profits tax-free.
- NZPA