The New Zealand dollar is poised to rise above 70 U.S. cents with growing expectations the Reserve Bank of Australia will hike interest rates this afternoon, bolstering investor appetite for higher-yielding, or riskier, assets.

RBA Governor Glenn Stevens will hike the target cash rate 15 basis points to 4 per cent according to a Reuters survey of economists, though the market is less convinced, pricing in a hike as a 60 per cent chance.

The Australian dollar was buoyed by rising copper prices in the wake of the Chilean earthquake on Sunday, while the kiwi was helped by higher prices for the so-called soft commodities produced in New Zealand.

"Today's RBA interest rate decision has the potential to spur volatility in the NZD, given markets are currently 60% priced for a 25bps rate hike," said Mike Jones, currency strategist at Bank of New Zealand. "If the RBA does hike, expect a knee-jerk surge in the NZD/USD and further weakness in NZD/AUD."

The kiwi was little changed at 69.86 U.S. cents from 69.88 cents yesterday, and jumped to 46.63 pence from 46.11 pence. It rose to 64.81 on the trade-weighted index, or TWI, a measure of the currency against a basket of five trading partners, from 64.68 yesterday, and edged down to 62.31 yen from 62.39 yen.

It slipped to 77.66 Australian cents from 77.71 cents yesterday, and gained to 51.57 euro cents from 51.26 cents.

Tim Kelleher, vice president of institutional banking and markets at Commonwealth Bank of Australia, said the currency may trade between 69.75 U.S. cents and 70.50/71 cents today after finding support on the back of rising commodity prices, and he predicts this will be sustained after the announcement of two uridashi bonds worth some $450 million this week.

Though an RBA rate hike will boost the kiwi against the greenback, it could push it down to its lowest level since December 2000 against the Australian dollar as investors eschew investing in New Zealand for the so-called 'lucky country.'

Australia avoided a recession and became the first G-20 nation to embark on tightening monetary policy settings, and has kept its unemployment rate below 6%.

New Zealand's central bank Governor Alan Bollard will review the official cash rate next week, and is expected to keep interest rates at a record-low 2.5% while reiterating he will begin tightening in the middle of the year.

The pound sank amid rumours the deal that will see insurer Prudential Plc will buy American International Group's Asian business for some US$35.5 billion involves selling US$25 billion worth of the British currency.

"The sterling got poleaxed – AIG selling its Asian business for US$35 billion put the currency under pressure," said Tim Kelleher, vice president of institutional banking and markets at Commonwealth Bank of Australia.