The New Zealand dollar rose heading into Christmas as it continued to be buoyed by the imminent signing of a preliminary trade deal between the US and China.
The kiwi was trading at 66.32 US cents at 1pm in Wellington compared with 66.06 cents at 5pm yesterday; the trade-weighted index rose to 72.95 points from 72.71. The New Zealand dollar earlier reached 66.38 cents, its highest level since July.
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A combination of US President Donald Trump tweeting that the trade deal will be signed "very soon" and China's announcement yesterday that it is reducing import tariffs on 859 items from January 1 helped the kiwi currency break through recent strong resistance.
Bloomberg has calculated the tariff cuts will affect almost US$400 billion ($603.2b) of foreign goods sold to China annually.
"It's taken on a bit of risk-on flavour. The kiwi looks very strong, now that it's got through 66.25," said Martin Rudings, an adviser at OMF.
The domestic currency was trading at 95.73 Australian cents from 95.64.
"The Aussie's still struggling with its raging fires and it looks as if they will get worse over the Christmas period," he said.
The domestic currency was trading at 95.73 Australian cents from 95.64.
"There's plenty of people lining up to sell the kiwi/Aussie cross above 96 cents but that's still got pressure to grind higher, just on the fundamentals," Rudings said.
While the market has another rate cut from the Reserve Bank of Australia priced in for February, it isn't pricing in another cut from the RBNZ.
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Fires in New South Wales and South Australia have swept through more than four million hectares and nine people have lost their lives to them since September.
The New Zealand dollar was at 51.22 British pence from 50.77, at 59.79 euro cents from 59.61 euro cents, at 72.53 yen from 72.25 yen and at 4.6506 Chinese yuan from 4.6316.
The two-year swap rate rose to a bid price of 1.2553 per cent from 1.2507 per cent yesterday while 10-year swaps nudged up to 1.7575 per cent from 1.7525 per cent.
