By ELLEN READ
End-of-year forecasts for the New Zealand dollar remain in place - at 50USc - despite the currency's present strong run.
Boosted by momentum buyers (speculators who use computer models to determine their trades), the kiwi has risen sharply against its Australian and United States counterparts over the past week.
On Monday night, it hit 88.22Ac - its highest level in nearly five years - and a three-month high of 48.51USc.
Bank of New Zealand currency strategist Stuart Ritson said the rise reflected a renewed focus on yields.
Added to this was the recent issue of several Eurokiwi bonds, strong figures on economic growth and the sale of 20 per cent of Telecom.
Ritson said the New Zealand dollar was the best performing global currency over the past week or so.
Its gains against the Aussie reflected the relative interest rates in the two countries and their economic fundamentals, both of which were in New Zealand's favour.
WestpacTrust currency strategist Johnathan Bayley said further gains for the kiwi against the US dollar were not justified because of deepening pessimism over the global growth outlook.
"The bigger picture is not that supportive of the kiwi but we have had a big technical break, which in turn has attracted more support."
He said relative interest rates did not support further gains in the kiwi/aussie cross rate.
With the New Zealand cash rate close to a neutral policy, risks appeared evenly balanced here, he said.
Reserve Bank of Australia rhetoric, by contrast, suggested rates there were on an upward path.
Bayley said the bank did not expect the kiwi/aussie cross rate to build on recent gains and history showed that it was more likely to soften.
Rampant kiwi believed to have run its course
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