The New Zealand dollar was trading as high as 39.80USc yesterday evening, rallying from morning lows.
Dean Sheridan of Citibank said the kiwi hit an overnight low of 39.10c, but was likely to hold the 39.50c level in the next 24 hours. "We've rallied towards the end of the day on some stop-loss buying," Mr Sheridan said.
"Aussie's a little higher, and has dragged us with it. During the day we've seen some quite steady buying from local exporters and fund managers just re-hedging as well. So we've made quite good grounds against the US and aussie."
US investment finance house Goldman Sachs said in its weekly commentary that the kiwi had reached a turning point and was forecast to rise against the US dollar as much as 33 per cent in the next year .
"With growth accelerating, some of the excessive gloom towards New Zealand may be set to wear off, providing a short-term catalyst for the currency," said Jim O'Neill, Goldman's chief currency economist in London.
Mr O'Neill felt that the Shell/Fletcher Energy deal would prove to be the catalyst for the kiwi's turnaround in terms of currency flows and in the signal it sent to foreign investors about attitudes towards foreign investment.
The Australian dollar picked up from its record 50.76USc low late in the day amid rumours of RBA intervention.
- NZPA
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