The New Zealand dollar briefly surged above US73c against the greenback for the first time in more than three months overnight on Friday.
The kiwi peaked around US73.25c but by 8am today was back to US72.51c, little different from its level at 5pm on Friday.
The NZ dollar did hold
onto gains against its Australian counterpart, reaching an 11-week high and at today's local open buying A78.70c, up from A77.91c at 5pm on Friday.
But gains against the European and Japanese currencies, as with those against the US dollar, proved short-lived.
The NZ dollar reached a 33-month high around 0.5510 euro, but by 8am today was down to 0.5432, below the 0.5470 at 5pm on Friday.
The euro rallied overnight Friday as expectations that Greece would soon receive emergency aid helped calm investors concerned at how Athens will pay its huge debts. The aid plan was confirmed early today.
From 68.14 yen at 5pm on Friday, the kiwi also climbed towards six-month highs at 69 yen, but then fell away to be at 67.96 yen at today's local open. The trade-weighted index was 67.65 around 8am, little changed from the 67.62 at 5pm on Friday.
BNZ strategist Mike Jones said the NZ dollar was the strongest performing currency last week.
Confirmation from the Reserve Bank that New Zealand interest rates were set to rise "over coming months" had spurred strong appetite for the kiwi, particularly against the low yielding euro and yen.
In the coming week the most important data would be the household labour force survey on Thursday, said Jones said.
If the unemployment rate went up any further it would seriously question the case for a rate hike as soon as June.
- NZPA
