The New Zealand dollar increased more than 1 US cent after America's economy expanded less than forecast in the first quarter, supporting the view the Federal Reserve has little room to move on fiscal policy.
The New Zealand dollar traded at 82.21 US cents at 8am, little changed from 82.19
cents at the close of trading in New York on Friday though up from 81.07 cents in New Zealand on Friday. The trade weighted index was at 72.84 from 72.79.
Higher-yielding currencies gained after US Commerce Department data showed gross domestic product in the world's largest economy rose at an annual 2.2 per cent rate in the first quarter. That's down from 3 per cent in the previous quarter and missed the 2.5 per cent prediction in a Bloomberg survey.
The data "added fuel for the market to think that the Fed will stay in a stimulative policy," said Stuart Ive, currency strategists at HiFX. "The kiwi is right at that top of its range now - technically you might see a short squeeze in the kiwi this morning."
At the Federal Open Market Committee's March meeting, policy makers said they will hold off increasing monetary accommodation unless the US economic expansion falters or prices rise at a rate slower. In January, the Fed pledged to keep interest rates near zero until at least the end of 2014.
