The New Zealand dollar rose as a key measure of risk sentiment improved with the kiwi stronger even after dairy prices fell for the fourth straight dairy auction in a row.

The kiwi dollar rose to 68.31 US cents as at 8am in Wellington from 68.01 cents late yesterday. The trade-weighted index gained to 72.34 from 72.19 yesterday.

In the US, the Standard & Poor's 500 Index rose above 2600 for the first time while the Chicago Board Options Exchange Volatility Index (VIX), known as Wall Street's fear gauge, tumbled more than 7 per cent to a reading of 9.88. Stronger risk appetite tends to favour currencies such as the kiwi whose fortunes are generally tied to global growth. The local currency gained after the GlobalDairyTrade auction, even though it showed the GDT price index fell 3.4 per cent and whole milk powder dropped 2.7 per cent to US$2778 a tonne.

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"The mild bounce in the NZD sits more comfortably with the prevailing positive risk undertone and the fact that the recent NZD weakness has been a little difficult to explain," said Doug Steel, senior economist at Bank of New Zealand, in a note. "Yesterday's risk on tone extended overnight, as equities push onwards and upwards and the VIX fear index fell to a risk-loving level sub-10."

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The kiwi was also helped by a gain in the Australian dollar after Reserve Bank of Australia Governor Philip Lowe said in a speech to the Australian Business Economists' annual dinner that while there was no case for an adjustment in near-term monetary policy, the situation could change.

"If the economy continues to improve as expected, it is more likely that the next move in interest rates will be up, rather than down," Lowe said.

The kiwi dollar slipped to 90.09 Australian cents from 90.23 cents late yesterday as the Aussie gained from a five-month low against the greenback.

Locally, traders will be watching today for October migration while in the US, Federal Reserve chair Janet Yellen, who has signalled she will step down when her replacement is named, is due to give a speech at the Stern Business School.

The kiwi rose to 58.14 euro cents from 57.95 cents and gained to 51.58 British pence from 51.35 pence. The local currency rose to 4.5272 yuan from 4.5135 yuan and gained to 76.71 yen from 76.55 yen.