China has said it will retaliate but hasn't said exactly how, Kelleher said.
Earlier this week, US Secretary of State Mike Pompeo asserted that "Beijing's claims to offshore resources across most of the South China Sea are completely unlawful, as is its campaign of bullying to control them."
The currency is also buoyed by gains in US equities futures on the back of more news from Moderna that its vaccine produced an immune response in all 45 people in its latest study.
While Moderna's press release led to its shares jumping 4.5 per cent, Merck chief executive Kenneth Frazier said US government officials and drug companies are doing the public a "grave disservice" by talking up the potential for a successful vaccine this year.
There are massive scientific and logistical obstacles to achieving such a feat, Frazier said in an interview with a professor at Harvard Business School.
"What worries me the most is that the public is so hungry, is so desperate to go back to normalcy, that they are pushing us to move things faster and faster," Frazier said.
It typically takes several years to develop vaccines – Merck's vaccine for mumps took four years of R&D before it was approved. Frazier said manufacturing and distribution will be an even bigger challenge.
The market is also awaiting a raft of data on Thursday, most notably for the kiwi the local inflation data for the June quarter.
The New Zealand dollar was trading at 93.58 Australian cents from 94.06 cents at 5pm yesterday, at 52.07 British pence from 52.06 pence, at 57.45 euro cents from 57.61 cents, at 70.23 yen from 70.12 yen and at 4.5841 Chinese yuan from 4.5827 yuan.
The bid price on the two-year swap was at 0.2000 per cent from 0.1975 per cent, while the 10-year swap was at 0.7200 per cent from 0.7150 per cent yesterday.
