NZ dollar rallies
The New Zealand dollar has been the star performer on global currency markets overnight.
The Kiwi has leapt to 68.5 US cents. That is a rise of almost two percent from yesterday morning.
The US dollar slumped following a speech by Federal Reserve (Fed) chair Janet Yellen. She told the Economic Club in New York that the signs for the US economy are mixed and the Fed will proceed with caution when it ponders future interest rate hikes.
That makes countries like New Zealand more appealing for investors because the interest rates are higher.
Most major currencies gained against the US dollar. But the Kiwi was the strongest performer.
The Kiwi is now well above the level it was trading at before the Reserve Bank cut the Official Cash Rate on March 10. Back then the Kiwi was trading at 67.78 prior to the 9am announcement, before falling to 66.30 US cents by 5pm.
The US dollar has lost around half a percent in value against the major currencies today.
The Fed raised interest rates in the US in December for the first time since the Global Financial Crisis. At the time it indicated that it was contemplating hiking rates four times this year (lifting rates by one percent). But more recently Janet Yellen said the Fed is now contemplating two hikes this year.
Today's speech reinforced that message.
The Kiwi has also gained almost one percent against the Australian currency, sitting at 89.88 cents. That compares to 89.20 yesterday afternoon.
Currency analysts say that the Kiwi might struggle to break through 69 cents.
Tomorrow will see the release of the latest ANZ Business Survey. If that is weaker than expected it will encourage talk that New Zealand's Reserve Bank will soon cut interest rates again. This would be likely to lower the value of the New Zealand dollar.
Janet Yellen's comments also gave US stocks a boost.
Both the Dow Jones Industrial Average and the S&P500 reversed earlier losses to close at their highest levels this year.
Both indexes are within 4 percent of their 52-week highs
The prospect of rates staying lower for longer has given markets a boost. It means the yields on offer on the market look more attractive and it also means that American companies will enjoy continued low borrowing costs.
The tech-heavy Nasdaq index gained 1.6 percent.
Apple gained 2.4 percent.