KEY POINTS:
The New Zealand dollar surged to an 8-1/2 month high of US67.50c today.
The kiwi also strengthened overnight against other major currencies including making up nearly half a cent on the aussie dollar.
ANZ bank said the NZ dollar had been in huge demand. A late session dip
below US67c yesterday had seen buyers lining up and that, along with the US dollar weakness, ensured new recent highs were hit by the kiwi.
Against the greenback, the kiwi closed easier at US67.14c but still ahead of the US66.95c close yesterday evening.
The NZ dollar also peaked against the Australian dollar around 4am, getting above A87.05c before slipping to A86.92c by the close. It finished here yesterday at A86.49c.
The trade weighted index hit 67.19, its highest since March. It closed on was at 67.01 from 66.76 yesterday.
The continuing strength of the NZ dollar will be a blow for Finance Minister Michael Cullen who yesterday repeated warnings about the strength of the currency, speaking of an "unhealthy" current account deficit, with inflation "uncomfortably" high.
With the possibility that Reserve Bank governor Alan Bollard may yet raise NZ interest rates again next month from 7.25 per cent, the kiwi is retaining its yield attraction.
Traders are awaiting next week's labour cost numbers as the key data determining whether Dr Bollard delivers a pre-Christmas rate hike.
In Tokyo trading, the US dollar crept up against the yen, edging further away from a one-month low hit on weaker-than-expected factory figures as investors tweaked positions ahead of US jobs data.
The US dollar had slipped yesterday to one-month troughs against the yen and euro after the Institute for Supply Management's (ISM) manufacturing index for October fell to a three-year low.
The data extended a run of soft US figures this week that suggest to the market the Federal Reserve will keep interest rates steady for some time, though much-anticipated jobs data on Friday is seen as a key gauge of how the economy is shaping up.
The euro was steady on US$1.2755.
Rates:
5pm today 5pm Wednesday
NZ dlr/US dlr US67.14c US66.95c
NZ dlr/Aust dlr A86.92c A86.49c
NZ dlr/euro 0.5264 0.5245
NZ dlr/yen 78.74 78.33
NZ dlr/stg 35.21p 35.06p
NZ TWI 67.01 66.76
Australian dollar US77.24c US77.42c
Euro/US dollar 1.2752 1.2761
US dollar/yen 117.27 117.01
- NZPA