KEY POINTS:
The New Zealand dollar pushed up toward US75c by the close of trading today as the US dollar continued to languish.
The kiwi closed at a six-week high of US74.87c, over half a cent higher than it close yesterday.
Against the Japanese yen, the kiwi climbed to a
six-week high of 86.49 yen from 85.30 at 4.30pm yesterday.
But it rose on all the major cross rates and the trade-weighted index gained 0.8 per cent to 70.54.
ANZ bank said the yen was weakening across the board as the rally in global equities saw riskier trades being put on.
Both the trans-Tasman currencies were being supported by offshore yield demand.
BNZ economist Stephen Toplis said that although BNZ strongly believed the NZ dollar was fundamentally overvalued and would eventually fall to near-equilibrium levels approaching US60 cents, it now looked as if it would stay stronger for longer.
"It may even forge higher through until early next year. Accordingly, we have revised upward our near term track for the kiwi."
Mr Toplis said this was due to a combination of a much weaker US dollar outlook set against a more optimistic view on the state of the Australian dollar, which in turn helps the kiwi.
The kiwi got a small fillip today from a small rise in business confidence, where a rosy view in the agriculture sector balanced pessimism among construction companies, according to the National Bank's Business Outlook.
"By and large, businesses appear to have shrugged off global and domestic uncertainty," National Bank chief economist Cameron Bagrie said.
Traders will keenly watch GDP data tomorrow, although as always, its historic nature means it can easily be shrugged off as dated.
In major currency trading, the US dollar steadied around record lows against the euro as investors felt the US currency's fall due to the Federal Reserve's monetary easing had been too fast.
The dollar hit a 15-year low versus a basket of currencies earlier this week after the US central bank cut its benchmark fed funds rate by 50 basis points to 4.75 per cent last week.
"The dollar is still on a downward trend," said a senior trader at a Japanese brokerage. "But it is also true that investors are wary of the euro being overbought against the dollar."
The euro has risen nearly 4 per cent against the US dollar so far this month.
Reuters currency rates
5pm today 4.30pm yesterday
NZ dlr/US dlr US74.87c US74.30c
NZ dlr/Aust dlr A85.30c A85.09c
NZ dlr/euro 0.5290 0.5247
NZ dlr/yen 86.49 85.30
NZ dlr/stg 37.11p 36.81p
NZ TWI 70.54 69.96
Australian dollar US87.79c US87.28c
Euro/US dollar 1.4142 1.4152
US dollar/yen 115.52 114.86
- NZPA