The New Zealand dollar rose against all major currencies after inflation data came in at the upper end of expectations.
The Consumers Price Index for the December quarter came in at 0.1 per cent with the annual pace holding steady at 1.9 per cent.
The kiwi was trading at 67.66 US cents shortly after 5pm in Wellington from 67.24 at 8.30am. The trade-weighted index climbed to 73.46 points from 73.06.
Economists had forecast a zero to 0.1 percent December quarter outcome.
Nevertheless, Peter Cavanaugh, senior client advisor at Bancorp Treasury Services, says some in the market had feared the quarterly result could have been negative, so were cheered by the "miss."
Although the result was below the Reserve Bank's 0.2 per cent forecast, economists see signs within the data that point to building inflation pressures. That suggests less of a chance the central bank will cut its official cash rate.
One bank, ANZ, is still forecasting an OCR cut later this year.
ANZ economist Liz Kendall says that while the inflation data was "undeniably solid" it is becoming increasingly apparent that "economic momentum is now fading with forward-looking indicators pointing to further gradual petering out.
"Resource pressures look to be past their peak, meaning a durable lift in domestic inflation will be harder to achieve."
But other economists continue to predict that the next OCR move will be up, although when that might happen keeps being pushed back.
Looking globally, the United States partial government shutdown dragged into its 32nd day, increasing the likely hit to economic growth with each passing day.
Although the US Senate is preparing two competing bills that could reopen the government, both have been given long odds of garnering the necessary 60 votes needed to pass them. There's still the big question as to whether President Donald Trump will sign them.
Data from Japan showing that country's exports fell the most in more than two years in December, dragged down by plummeting shipments to China, reinforced a raft of recent figures pointing to a slowing Chinese economy.
Cavanaugh noted that within the next 72 hours a number of central bank meetings are scheduled, including in Japan, South Korea and Europe.
"They're not expected to do anything but they're expected to repeat the doom and gloom about risks," he says.
The New Zealand dollar is trading at 94.83 Australian cents, up from 94.34, at 52.24 British pence from 51.84, at 59.55 euro from 59.13, 74.21 yen from 73.44 and 4.5911 Chinese yuan from 4.5772.
The two-year swap rate is at 1.9179 per cent from 1.9043 and the 10-year swap rate is at 2.5950 per cent from 2.6025.