The New Zealand dollar rose offshore overnight on end-of-month-and-quarter book-squaring and then traded sideways through the domestic session.
But the market remains torn between fears about Covid-19's spread, particularly in the United States, and optimism about recovering economic activity.
The kiwi was trading at 64.42 US cents at 5pm in Wellington from 64.21 cents at the same time yesterday. The trade-weighted index was at 71.41 from 71.20.
"It was month-end and quarter-end last night for a lot of banks. There was reasonable demand for the currency and it's just traded sideways since," said Tim Kelleher, head of foreign exchange sales at Commonwealth Bank of Australia.
"There's lots of anecdotal stuff that we're not seeing the worst of the virus yet," Kelleher said.
We're also not seeing the true impact of the crisis because there are so many government subsidies still being paid, he added.
For example, in the US about 20 million unemployed people are receiving an additional US$600 ($931.44) a week through to the end of July – unemployment benefits vary by state but the average is just US$370 per week.
In NZ, businesses can apply for a government wage subsidy through to Sept. 1 and the government's small business loan scheme administered by the Inland Revenue Department, which allows businesses to borrow up to $100,000 interest free for a year, is set to expire on July 24.
Kelleher said the Australian government is allowing Australians to withdraw A$10,000 ($10,695) a year from their superannuation funds. The new financial year began today and the Australian Tax Office, which administers the withdrawals, saw its website crash this morning under the weight of applications.
"It just goes to show people are struggling out there. The demand from people wanting to get money out of their super fund is quite extreme," he said.
As for the spread of Covid-19 in the US, it recorded its second-worst ever day for new infections on Tuesday and the sixth consecutive day of new infections exceeding 40,000.
The US's top infectious disease expert told a Senate panel overnight that the daily infection rate could reach 100,000 if current outbreaks in states including California, Texas and Florida are not contained.
The kiwi dollar was trading at 93.47 Australian cents from 93.40 cents at 5pm yesterday, at 52.10 British pence from 52.18 pence, at 57.42 euro cents from 57.13 cents, at 69.34 yen from 69.16 yen and at 4.5505 Chinese yuan from 4.5377 yuan.
The bid price on the two-year swap was at 0.2025 per cent from 0.1930 per cent, while the 10-year swap was at 0.7525 per cent from 0.7150 per cent yesterday.