The local currency got a boost when the leader of Italy's Five Star Movement, Luigi Di Maio, and League leader Matteo Salvini said they had reached an agreement on terms for forming a new government, thereby avoiding fresh elections.
However, fears of a possible global trade war were reignited as US allies took steps to retaliate after President Donald Trump moved ahead with tariffs on aluminium and steel imports from Canada, Mexico and the European Union.
Tim Kelleher, head of institutional foreign exchange sales at ASB Bank, said while the kiwi is higher over the week "it is washing around with a bit of risk on, a bit of risk off.
All it has done is reinforce the fact that 68.50-to-69 (US) cents is the bottom of the range and kiwi/Aussie's bottom of the range is 91.50 (Australian cents)," he said. The kiwi rose to 92.62 Australian cents from 92.38 cents late yesterday.
He said he expects the currency to eventually push lower against the greenback, given the US is lifting rates while they are firmly on hold in New Zealand. "I think the trend is lower (in the kiwi), it's just a question of timing," he said.
Markets will now focus on US jobs data due later in the global trading day to predict the course of the Federal Reserve's monetary policy. The data is expected to show the US added 190,000 jobs in May, up from 164,000 in the previous month,
The kiwi traded at 59.86 euro cents from 59.85 cents. It rose to 76.26 yen from 75.85 yen and gained to 4.4842 yuan from 4.4722 yuan. It rose to 52.71 British pence from 52.50 pence.
New Zealand's two-year swap rate increased 1 basis point to 2.21 per cent while 10-year swaps rose three basis points to 3.11 per cent.
