Currency experts are not ruling out the possibility of a seemingly unstoppable New Zealand dollar reaching parity - or equal value - with the US currency.
That would be great news for Kiwis planning a trip overseas, but a nightmare situation for many exporters. And adding to the pain, the kiwi is also making ground against the Australian dollar.
The New Zealand dollar hit an all-time high of US86.40 on Thursday night, as European leaders reached an agreement on a new bailout package for debt-ridden Greece, bolstering sentiment in foreign exchange markets.
The new post-float record prompted Prime Minister John Key, on a visit to the US, to say the rising kiwi would dampen economic growth if not brought under control. A strong dollar erodes returns on this country's export revenue, and makes locally made products less competitive overseas.
Westpac senior market strategist Imre Speizer said he would not rule out the kiwi reaching parity with the greenback - meaning it could trade at US$1 - some time in the next two years, and that it may also rise to US87c during the next two weeks.
BNZ currency strategist Mike Burrowes said two currency houses had suggested the kiwi could reach parity with the greenback over the next 24 months.
"[The suggestion] is not ridiculous ... you can't rule anything out, but it pays to be a little bit cautious about taking where you are today and extrapolating that into the future," he said, adding that there was potential for the New Zealand dollar to reach US90c over the next few weeks.
Burrowes said anticipated interest rate rises as well as positive data on economic recovery, were already being reflected in the kiwi's exchange rate with the greenback.
"That's why you're seeing the currency at post-float highs, so it becomes a question of how much more of that good information do you need to keep pushing the currency up."
He said the focus of foreign exchange markets would now shift to the debt ceiling debate in the US.
The US Government is considering increasing the amount of money it is allowed to borrow, to avoid a default, and has until August 2 to come up with a solution.
"That's causing some US dollar weakness, which is helping keep the New Zealand dollar up [against the greenback]."
He said interest rate and economic growth differentials between Australia and New Zealand would favour an appreciation in the kiwi's value against the Australian currency.
The New Zealand dollar reached almost A80c on Thursday, and Burrowes said the BNZ expected it to hit A88c over the next 12 months.
ExportNZ executive director Catherine Beard said the kiwi's weakness against the aussie - trading as low as A72.66 in March - had been providing a "helpful buffer". But she said lower wages and other costs in this country still provided a competitive advantage for firms exporting across the Tasman.
Federated Farmers president Bruce Wills said the combined impact of softening commodity prices and a rising kiwi was a concern for agricultural exporters.
The New Zealand dollar was trading at 59.87c against the euro and 52.86 pence against the pound sterling late yesterday.
- Additional reporting: Agencies