"It's a continuation of a move that's been in place for a number of weeks now," said Richard Franulovich, currency strategist at Westpac Banking Corp in New York.
"Back in mid-December, the RBNZ formally reinstated a tightening bias in their guidance and ever since then, kiwi has been outperforming Aussie and meanwhile across the Tasman you have got easing risk priced into the curve so it's a pretty stark contrast in the trajectory of monetary policy for the two economies."
Westpac's Franulovich said the kiwi may continue to track higher against the Aussie in the absence of any change in the interest rate outlooks however he doubts it will reach parity.
The cross rate may stabilise should iron ore prices continue their bounce seen in the last few sessions and if there is weakness in next week's GlobalDairyTrade auction, he said.
New Zealand's Reserve Bank may also start to talk down the kiwi, and Australia's Reserve Bank may not ease monetary policy as early as its next meeting on Feb. 3
Traders will be eyeing the release of today's HSBC China Manufacturing PMI report, with a higher than expected reading likely to bolster the Aussie, he said.
The New Zealand dollar rose to 64.39 euro cents from 64.01 cents yesterday, advanced to 50.31 British pence from 50.06 pence and was little changed at 93.60 yen from 93.61 yen. The trade-weighted index gained to 79.38 from 79.07 yesterday.
