The New Zealand dollar ground higher to another post-float high against the US dollar on the eve of today's Reserve Bank announcement.

But it pulled back sharply against the Australian dollar on the back of stronger than expected inflation data across the Tasman.

The kiwi hit US87.65c, easily surpassing Tuesday's post-float high of US87.40c, driven by global concern about the US Government's creditworthiness and the market's view that the Reserve Bank will need to take a more aggressive stance with its interest rate policy to stem the rising inflation pressures.

As the US debt stand-off drags on, commodity currencies such as New Zealand's are increasingly being viewed as safe havens by international markets.

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Foreign exchange markets were in turmoil while President Barack Obama struggled to raise the US borrowing limit by the August 2 deadline, said Kevin O'Sullivan, head of financial markets at OM Financial.

The US dollar hit a record low versus the Swiss franc, and fell to its lowest level against the yen since mid-March, it lowest level against the Canadian dollar since November 2007, and its lowest level against the Australian dollar since May.

The New Zealand dollar has gained about 22 per cent against the US dollar since March. O'Sullivan said he did not expect it would be long before the currency breaks over US88c.

But the local currency lost some ground against the Aussie dollar yesterday when it soared to a new high in reaction to strong inflation data.

The Aussie rose to a 29-year high of US$1.1063 after Australia's consumer price index rose by a higher-than-expected 0.9 per cent in the June quarter, which rekindled fears of a quick rate hike across the Tasman.

The kiwi quickly reversed its earlier firming trend against the Aussie, dipping by about one Australian cent at one stage.

Late in the session, the Australian dollar cross rate was at A79.23c compared with A79.53c early in the day.

Attention now turns to today's official cash rate announcement from the Reserve Bank, due out at 9am.

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- Additional reporting NZPA