The New Zealand dollar briefly stretched above US74c today as non-US dollar currencies got a lift from reports that food company Kraft is likely to lift its bid for Cadbury Plc.
The NZ dollar then drifted back and attention is turning to tomorrow's Consumer Price Index (CPI) report for theDecember quarter, which is one of the more important influences on interest rate policy.
The NZ dollar was US73.84c at 5pm from US73.96c at 8am and US73.57c at 5pm yesterday.
Imre Speizer, currency strategist at Westpac, said the speculation of a raised bid for Cadbury helped boost sterling and other currencies.
"I guess it pushed up on the idea of it actually happening and that they get a decent price and a decent foreign exchange transaction buying sterling on the back of it," he said.
The NZ dollar rose from US73.90c to US74.10c around the middle of the day when the Cadbury story was emerging. Otherwise traders are waiting for the CPI report.
"It all depends on whether we get a surprise or not but it is a big number and the world will be watching it," Mr Speizer said.
Analysts are expecting a flat CPI in the December quarter, taking the annual rate to 2.1 per cent, according to a poll by Reuters.
There will also be some interest in the Tax Working Group report tomorrow, which will advise on the medium-term direction of the tax system. The taxation of bonds will one issue monitored by investors.
The NZ dollar has been around 22-month highs against a weak euro and was 0.4497 euro at 5pm from 0.4510 yesterday. Sentiment for the euro has been eroded by worries about the Greek economy.
The NZ dollar was little changed against the yen at 66.83 yen at 5pm from 66.87 at the same time yesterday.
Against the Australian dollar, it was at A79.85c from A79.88c yesterday.
The trade weighted index was 66.68 from 66.61 yesterday.
