The New Zealand dollar climbed above 68 US cents in light holiday trading after weaker-than-expected US data sapped demand for the greenback, while local figures yesterday supported the local economic outlook.
The kiwi rose to 68.06 US cents at 5pm in Wellington from 67.67 cents at 8am and 67.49 cents yesterday. The trade-weighted index increased to 74.02 from 73.56.
Trading has slowed this week in the lead-up to the Christmas holiday, with the upcoming final reading for third-quarter US gross domestic product and a manufacturing gauge the highlight for investors.
"The kiwi feels like it could squeeze a little bit higher, especially if US data tonight and tomorrow night, which includes durable goods and personal income, continues a run of softer US data," said Sam Tuck, senior FX strategist at ANZ Bank New Zealand in Auckland. "The long run for the kiwi is still on downside once this squeeze is over."
The price of Brent crude oil rose 0.5 percent to US$36.54 a barrel, stoking a broader increase in commodity prices and underpinning support for the kiwi, which is sensitive to those assets.
New Zealand's two-year swap rates increased one basis points to 2.84 percent at 5pm in Wellington, and 10-year swaps rose two basis points to 3.7 percent.
The kiwi gained to 4.4075 Chinese yuan from 4.3725 yuan after a statement from Chinese government officials following the conclusion of the Central Economic Work Conference suggested that monetary policy must be more flexible while fiscal policy becomes more forceful, and stoked speculation the People's Bank of China may provide more stimulus.
The local currency edged up to 94.29 Australian cents from 94.18 cents yesterday, and climbed to 82.53 yen from 81.82 yen yesterday. It increased to 62.34 euro cents from 62.09 cents rose to 45.72 British pence from 45.25 pence yesterday.