The New Zealand dollar continued to rise against the greenback amid buoyant share markets in Asia-Pacific and rising US equities futures as investors continued to focus on data showing the global economy bouncing back faster than expected while ignoring rising Covid-19 infections.
The kiwi was trading at 65.50 US cents at 5pm on Wellington from 65.32 cents in New York on Friday while the trade-weighted index was at 72.31 from 72.09.
"The Chinese markets particularly are well up on the day" and the domestic currency has risen accordingly, said Mark Johnson, an adviser at OMF.
The Shanghai Composite Index was up more than 4 per cent late in the NZ trading day.
Investors are focusing on the positive aspects of data such as the US non-farm payrolls, which showed 4.8 million new jobs in June compared with economists' forecasts of about 3 million, Johnson said.
"But jobs are still 15 million below pre-Covid levels and unemployment is still 11 per cent," he said.
Johnson noted that the US has recorded its third consecutive day on Friday of new infections above 50,000. The infection rate tends to ease a bit on weekends, but US new infections remained well above 40,000 both days this weekend.
"How are they going to react when we start seeing over 100,000 cases a day – there's no suggestion that the trend is turning down," he said.
"You have to wonder how serious it needs to get before they think what's the impact" on the US economy.
The highlight of the week will probably be the Reserve Bank of Australia's latest monetary policy decision late tomorrow, NZ time.
Johnson said RBA governor Philip Lowe is likely to hold his cash rate steady at 0.25 per cent and to reiterate that monetary policy will remain accommodative for as long as required.
But Lowe may comment on the Australian dollar, which has risen from 55.2 US cents in mid-March to 69.62 cents late today.
The last time Lowe spoke about the Australian currency was on June 22 when he said a lower Australian dollar would help that economy but that it wasn't over-valued then – it was trading between 68.20 US cents and 69.11 cents.
Lowe said a rising currency could become a problem at some point, "but I don't think we've reached that point yet."
The New Zealand dollar was trading at 94.06 Australian cents at 5pm from 94.01 at the same time on Friday, at 52.40 British pence from 52.28 pence, at 58.01 euro cents from 57.99 cents, at 70.51 yen from 70.01 yen and at 4.6129 Chinese yuan from 4.6014 yuan.
The bid price on the two-year swap was at 0.2080 per cent from 0.2000 per cent, while the 10-year swap was at 0.7700 per cent from 0.7430 per cent on Friday.