"It's got a rocket up its backside," said Mitchell McIntyre, a dealer at XE, adding that the Federal Reserve's response to any market jitters or risk aversion has been to print yet more money, which has meant a massive supply of US dollars.
The Washington Post reports that the Fed has pumped US$3 trillion ($4.6t) into financial markets in the past three months through buying everything from Treasuries to corporate debt.
Given the state of the US economy, "it's fair to say they're going to have to continue printing money to prop it up and keep it out of recession," McIntyre said.
The market appears to be completely ignoring the civil unrest in the US as a result of the police killing of an unarmed black man and the growing tensions between the US and China.
Traders are also comparing how well various economies have been doing in coping with the coronavirus pandemic and have decided that Australia and New Zealand look like they're coming out of the ordeal better than their global counterparts, he said.
"We've almost become a safe haven and money needs a home. It makes no sense, but it is what it is."
It's particularly unusual this week because all the major banks had been predicting a further leg down for the kiwi. That in itself has helped fuel the rally as some traders were forced to unwind bearish positions.
And a major piece of data, the US non-farm payrolls for May, is due to be released later today.
"You don't usually see the market trend too aggressively going into the non-farm payrolls, you usually see it squaring up," McIntyre said.
The market is expecting another 7.75 million Americans will have lost their jobs last month, pushing the US unemployment rate from 14.7 per cent in April to 19.4 per cent.
The New Zealand dollar was trading at 92.97 Australian cents from 92.91 cents yesterday. It was at 51.42 British pence from 51.16 pence, at 57.15 euro cents from 57.20 cents, at 70.78 yen from 70.01 yen, and at 4.6032 Chinese yuan from 4.5727 yuan.
The trade-weighted index was at 71.73 from 71.36.
The bid price on the two-year swap rate was 0.2325 per cent from 0.2100 per cent, while 10-year swaps were at 0.8500 per cent from 0.7775 per cent yesterday.
