The New Zealand dollar edged over US67c for the first time in 10 months yesterday, opening the way for further gains, currency watchers said.
Yesterday the kiwi hitched a ride on the Australian dollar which spiked on better than expected retail sales data. The local unit swiftly rose about 30
points to touch US67.13c before easing below the US67c mark, eventually closing at US66.77c.
In commentary published shortly before yesterday's peak Westpac markets strategist Imre Speizer said the break higher overnight opened the way for further gains.
"Our immediate target is US67c, followed by 0.69. Beyond that, if the upward trend remains intact, 0.73 beckons. It would take a break below 0.66 to negate this bullish view."
Westpac had previously expected a larger downward move toward the US55c to US59c area based on the view the pace of the United States recovery would slow.
"However, that has not yet occurred in this cycle, and our monthly view for [the] NZ$1 has been proven wrong."
Speizer noted some indicators were pointing to a "V" shaped recovery for the US, "a phenomenon previously considered most unlikely".
"The complexion of New Zealand data, too, is trending positively," he said.
"While we don't rule out the possibility of a multiple-bottomed recovery [with similar implications for the NZ$1], our central view is now that the NZ$1 will strengthen over the next three to 12 months."
Derek Rankin, of Rankin Treasury Services, said the kiwi, having made quick gains in recent sessions might be due for a correction, "but I still think we're headed higher".
Rankin has expected the kiwi to reach US70c at some point this year but hadn't expected the pace of recent gains.
"Basically it's still the US dollar still coming under pressure and they're debasing their currency by printing money."
Overlaid on that was increased risk appetite based on the growing belief the worst of the economic downturn was over, which was being reflected in rising equity market indices and commodity prices.
