"Markets are getting a little bit nervous with the surprising policy switches coming out of Trump's mouth. We're in for a fairly volatile next six months as markets adjust to Trump implementing his policies or not," Johnston said.
"Previously the market was thinking he's going to be spending huge amounts on infrastructure, cutting taxes, now people are questioning that and the trade is reversing."
The kiwi fell to 58.33 British pence from 59p yesterday after a speech overnight in which British Prime Minister Theresa May confirmed the UK would seek to leave the European single market as part of its exit from the European Union.
"The pound had already weakened ahead of her speech so we've seen a bit of a relief rally in the pound. It's bounced back from incredibly low levels, but the jury's still out. There's going to be considerable uncertainty and some in the market think the pound could get weaker," Johnston said.
The kiwi also gained against its transtasman counterpart, rising to A95.36c from A95.07c yesterday. Against the euro, it rose to 67.32 euro cents from 66.97c and is now back at pre-Christmas levels.
The local currency also rose against the Asian currencies, reaching 81.42 Japanese yen from 81.13 yen and 4.9391 Chinese yuan from 4.9104 yuan.
New Zealand's two-year swap rate fell three basis points to 2.35 per cent, while 10-year swaps fell two basis points to 3.34 per cent.
