The New Zealand dollar hit a 10-day high on Monday, and held within sight of 10-month peaks, as strong stock markets underpinned investor appetite for currencies seen tied to global growth prospects. Asian stocks jumped more than 2 percent, following Friday's lead from Wall Street after upbeat US housing data and optimistic comments from the head of the US Federal Reserve.
One analyst said there looked to be little on the agenda to halt the kiwi's rise this week. "The lack of other major scheduled financial news suggests momentum carries the NZ dollar generally higher in the next few days, and maybe weeks," said Anthony Byett of currency advisers fxMatters.co.nz.
The kiwi stood at $0.6846/51 compared with $0.6720/24 in late trade on Friday. It traded a relatively narrow $0.6837-0.6873 range. The improvement in risk appetite and consequent erosion of the attraction of safe havens saw the NZ dollar gain against the yen to 10-day highs.
It also outperformed the euro to touch a 10-day high, and was steady against the neighbouring Aussie. An NZ dollar move towards $0.70, a level last reached in early September 2008, is seen likely this week, with the first hurdle being around $0.6890, and then $0.6950.
"However, it still remains difficult to see the NZ dollar... remaining above 70 US cents over a period of months," said Byett. New Zealand's data this week is largely second-tier, including July month overseas trade, building consents and household debt levels, while the Reserve Bank of NZ will release its quarterly survey on businesses' inflation expectations.
None of the data is seen altering the central bank's monetary outlook in its September 10 statement, in which the RBNZ is seen holding rates steady for a third month at 2.5 percent. New Zealand government bonds turned soft as the strength of stocks dimmed bonds' safe-haven allure. The yield on the benchmark NZ 10-year bond was 3 basis points higher at 5.78 percent.