It has gained nearly 2 percent this week, and if sustained, it would be the largest such increase in about a year. Resistance was found at the December 16 top of $0.7370 with support around $0.7330. The currency received a further fillip after Australia boasted its first trade surplus in almost three years in November, as surging commodity prices boosted export earnings beyond all expectations.
Exports jumped by 8.4 percent, or a whopping A$2.3 billion, with iron ore and coal, Australia's top exports, each showing double-digit gains. The New Zealand dollar touched its highest in three weeks at $0.7040, to be last at $0.7014. It has gained 1.1 percent this week and the next big level is $0.7050, the 61.8 percent retracement of its December fall.
A dearth of domestic data has seen the kiwi track to the whims of the US currency in recent days. The country's central bank holds its next policy meeting on February 9 and is considered certain to keep rates at 1.75 percent, with the market wagering it will remain there for much of the coming year.
New Zealand government bonds extended their rally, with yields falling as much as 6 basis points at the longer end. Yields on 10-year paper have dropped 30 basis points in just five sessions. Australian government bond futures rose, with the three-year bond contract up 3 ticks at 98.010. The 10-year contract added 4.5 ticks to 97.2650, while the 20-year contract gained 6.5 ticks to 96.6400.