The New Zealand dollar is headed for a 2.2 per cent weekly gain as markets were cheered by signs the US and China may be able to resolve their trade dispute.
The kiwi traded at 66.52 at 5pm in Wellington versus 66.57 US cents at 8am and 65.74 US cents yesterday. It traded at 65.09 last Friday in New York. The trade-weighted index was at 72.74 from 72.07 yesterday.
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Markets got a lift overnight when US President Donald Trump and his Chinese counterpart Xi Jinping said they had spoken and were making progress.
Trump tweeted that the discussions were "moving along nicely" and Xi said he is willing to meet Trump during the G20 summit in Argentina and further exchange views on bilateral ties and other major issues, according to state-owned Xinhua News Agency.
Sentiment had already been buoyed by news that the UK and European Union had agreed on a tentative deal for financial services.
The kiwi traded at 51.21 British pence from 51.15 British pence yesterday.
"I suspect there is more to come," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.
"The kiwi will probably hold about 66 US cents and could retest 67 or 68 now that it has got momentum."
Markets are now waiting for US jobs data for possible clues on monetary policy direction there. Investors expect the US economy to add 200,000 non-farm payrolls and the jobless rate to remain stable at 3.7 per cent, according to Dow Jones Newswires.
The kiwi also gained against the Australian dollar when Australian retail sales rose by 0.2 per cent in September from a month earlier, the Australian Bureau of Statistics said today, compared with a 0.3 per cent rise expected by economists.
The kiwi traded at 92.44 Australian cents from 92.31 Australian cents yesterday.
"The subdued rise in real retail sales in Q3 suggests that households are starting to feel the pinch from rising petrol prices and the slowdown in the property market. With the full effects of falling house prices yet to be felt, we think spending will slow further next year," said Marcel Thieliant, senior Australia and New Zealand economist for Capital Economics.
The kiwi rose to 4.6100 Chinese yuan from 4.5575 yuan and traded at 75.97 yen from 74.06 yen. It was at 58.36 euro cents from 57.67 cents yesterday.
New Zealand's two-year swap rate rose 2 basis points to 2.04 per cent; the 10-year swaps rose 1 basis point to 2.86 per cent.