The currency has been having trouble clearing a chart barrier around $0.7884/7892, a double top from October, though that means a break higher would be all the more bullish. The New Zealand dollar has also benefited from recent gains in dairy prices, as well as the appetite for risk trades in general.
The kiwi had edged up to $0.7178 on Monday, just under last week's three-month top of $0.7187. Resistance comes in at $0.7217, which was a peak from October. The currency had eked out gains of around 2 percent against the US dollar since the week before Christmas.
New Zealand government bonds eased, sending yields 3 basis point higher at the long end of the curve. Australian government bond futures were little changed with the three-year bond contract off half a tick at 97.890.
The 10-year contract was steady at 97.3600. Sean Callow, a senior currency strategist at Westpac, noted leveraged funds had sold a net 55,700 Aussie contracts on the Chicago Mercantile Exchange in the past three weeks.
Indeed, positions have turned net short for the first time in six months, suggesting the risk those shorts would have to be covered if the currency kept rising from here. "Curious to see net sales despite the commodity rally and US dollar weakness," said Callow. "It's a helpful backdrop for further Aussie gains."