KEY POINTS:
The New Zealand dollar topped US77c today for the first time since being floated 22 years ago and dealers said US80c was within striking distance.
The New Zealand dollar trade-weighted index also topped a post-float high, hitting 74.86 before edging back to 74.80 at the close.
The kiwi peaked around 5am at US77.11c, according to Reuters data, then eased to around US76.90c by 8am. It stayed above US76.80c all day and closed on US76.92c.
"It's bid still," said an Auckland dealer. "There's no changes on that front and expect more of the same next week.
Dealers said National Party's John Key's prediction in March, when the kiwi was around US74c, that it would reach US80c was looking a realistic possibility.
"It's going to hit US80c before it's going to hit US70c," said the Auckland dealer, who worked with Mr Key when he was foreign exchange dealer. "I would suggest he's looking more and more right every day."
There was no sign of Reserve Bank intervention today. The bank startled markets earlier this month when it sold kiwi dollars at least once as the kiwi headed to US76c.
GDP data today showing the economy grew at 1.0 per cent in the March quarter, its fastest pace in two years, did nothing to change sentiment. Traders said the number was exactly on expectations and only a weak number would have changed the outlook.
Today was the third time this week the kiwi hit a post-float high.
It showed a similar pattern against the euro, climbing from around 0.5630 early yesterday to a 17-month high of 0.5730 today .
Similarly with the yen, the kiwi climbed from its lowest level in 1-1/2 weeks around 92.60 early yesterday to end today on a fresh 20-year peak of 94.93.
The New Zealand dollar has soared 13 per cent against the yen in two months.
The pattern against the Australian dollar was somewhat different, with the kiwi having generally trended upwards against its trans-Tasman counterpart for the past three weeks.
It nosed above A91c mid-morning yesterday for the first time since February 2006 and made a few other brief forays above that level since, the latest around 3am. However, it opened easier on A90.90c and ended the session on A90.72c.
The ANZ bank today said buyers had emerged to take advantage of a short-lived unwind in the carry trade -- in which investors borrow low interest currencies to invest in higher yielding assets.
Carry traders got fresh legs today from Japanese inflation data showing the country still had a deflation problem.
Yesterday's better than expected New Zealand current account data plus a rebound in business confidence also emboldened fresh buying.
In major currrency trading, the US dollar held gains against the euro and yen after the Federal Reserve repeated concern about stubborn price pressures, reinforcing expectations that the central bank will stand pat on interest rates for some time.
- NZPA