The Kiwi dollar has hit a five-month on the back of a strong "New Zealand story", a senior economist says.

The kiwi today rose above 72 US cents for the first time since the beginning of March, with positive domestic data circumventing the uncertainty surrounding many of the world's leading economies. The dollar fell back to 71.75 cents later in the day.

ANZ senior economist Phil Borkin said the kiwi's gain in recent months was being led by broad-based strength across most of our export commodities.

"The terms of trade [are] at near-record highs," he said. "It's not just about dairy; our commodity price index is showing gains across horticulture, forestry and meat as well over the last little while."


While the domestic story was looking good, the global picture was precarious at the moment.

"There's still plenty of risks around the globe of the which we're always very mindful - the US political situation, the UK election - but the domestic story remains a relatively good one and we think that will continue for a while yet," he said.

The US Federal Reserve meets later this week and is likely to give some indication of further interest rate hikes in the States, which was weighing on the greenback at the moment, Borkin said.

The New Zealand dollar fell to 95.08 Australian cents this afternoon when gross domestic product data across the Tasman was in line with most analyst's expectations and not as weak as some had been predicting.

However, the weaker US dollar and a relatively soft outlook for Australia's economy was also driving New Zealand's currency up, Borkin said.

The kiwi dollar has gained 5.5 per cent on the Australian cross rate from its low in mid-March, prompting some strategists to ponder whether the two currencies will reach parity.

However, Borkin said ANZ's forecast didn't indicate parity would occur any time soon.

He did not expect the upward trend to continue and said the dollar was right about where it should be now.


"Well certainly momentum is pointing upwards but we do think that at these levels the positive New Zealand story is becoming fully priced," he said.

"We think the road higher from here is more difficult, so it's getting to that point where you'd start to look at selling any strengths rather than buying any dips. In other words, it's hard to see more strength from here in the near term, and we think it's getting pretty close to the point where things are pretty fair right here."

ExportNZ executive director Catherine Beard said while exporters were always wary of a higher New Zealand dollar, they were more resilient at higher exchange rates these days.

"The other thing is that with this strong exchange rate now, most businesses are involved in global supply chains so it's not just a straight exporting exercise - most companies are importing components and adding value before exporting again," she said.

"There's also lot more management in terms of hedging as well so they'll do things like locking in at exchange rates with the bank for a certain length of time."

However, exporters would be keeping a close eye on currency trends in the coming days and weeks and hoping it didn't surge too much higher.

"But exchange rates go up and down and the more important thing is the long term average and where they settle," she said.

"There's always a lot more comfort and you become a lot more competitive with a lower dollar, but as I mentioned there can some an upside to a decently-priced dollar for exporters."
- Additional reporting: BusinessDesk