By ELLEN READ
World currency markets continue to hold the US dollar in the same regard as the National Party caucus held Bill English - something to be dumped.
As a result, the New Zealand dollar remains strong, starting the week near six-year highs above US61c.
While the kiwi retreated a little during yesterday's trade, the weak US dollar, a robust local economy and high interest rate differential continue to support it.
At 5pm the kiwi was at US61.05c.
News from the US this week - a Federal Reserve meeting is expected to be more upbeat about the US economy, and strong September-quarter GDP is likely to be confirmed - could boost US dollar sentiment briefly, halting the kiwi's rise, but that is a short-term risk.
ASB Bank chief economist Anthony Byett said the outlook for the NZ dollar was continued appreciation over the next few months as the US dollar continued to decline.
Westpac senior currency strategist Johnathan Bayley is putting a 60.6USc to 61.75USc range on the kiwi for the week.
He said the market appeared to be favouring the currencies of the central banks likely to hike first - New Zealand, Australia and Britain.
Last week's confirmation by the Reserve Bank of NZ of a tightening bias had reinforced the broader NZ dollar strength evident in the trade-weighted index's recovery over the past fortnight, he said.
* Warren Buffett, the billionaire investor and chairman of Berkshire Hathaway, said the investment company had made "significant" foreign currency purchases in the past year and a half in a bet that the United States trade deficit would erode the value of the US dollar.
In a letter published on Fortune.com, Buffett said: "Our trade deficit has greatly worsened, to the point that our country's 'net worth', so to speak, is now being transferred abroad at an alarming rate."
Buffett declined to say how much or which foreign currencies he had bought.
He said he had never bought a foreign currency before the northern spring last year.
Buffett proposed establishing a new tariff plan that would promote exports and make imports costly.
He said the US trade deficit was a record US$324.4 billion during the first eight months of this year, growing from US$265.3 billion a year earlier.
Slower growth among major trading partners such as the European Union and Japan was limiting demand for United States goods, and United States consumers continued to buy low-priced products from countries such as China.
"Both as an American and as an investor, I actually hope these commitments prove to be a mistake," Buffett wrote.
"Any profits Berkshire might make from currency trading would pale against the losses the company and our shareholders, in other aspects of their lives, would incur from a plunging dollar."
Berkshire has increased its book value per share 22 per cent on average each year for four decades.
Its shares are trading at $76,500 on the New York Stock Exchange.
Buffett's 37 per cent stake is worth more than US$36 billion.
Buffett told Barron's in an interview published last weekend that a lack of appealing stocks and bonds was forcing Berkshire to keep more than US$24 billion in cash on the sidelines.
Strong kiwi drives over 61USc
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