The New Zealand dollar paused for breath on Friday after hitting a 26-year high, having outpaced a struggling Australian dollar as investors wagered kiwi interest rates could be the first to rise in coming months. The kiwi currency was enjoying the view at $0.8245 after reaching a post-float high of $0.8301 on Thursday.
It has surged 1.2 percent this week on the back of strong prices for its key exports, US dollar weakness, and the prospect a more hawkish central bank will start raising rates sooner. "This could see the NZ dollar go higher still, especially if US data remains soft, and European sovereign debt concerns intensify," the ANZ-National Bank said in a market note.
Kiwi is in uncharted territory, but some analysts have suggested it could target $0.8600 in the next few months. Support is seen at $0.8210 and $0.8185, with resistance at $0.8301, the latest high, and then $0.8320. The kiwi was also in the ascendant against the Aussie at around NZ$1.2833, just above the four-month low touched against the kiwi on Thursday.
The Aussie was idling at $1.0600 in late trade Friday, up from a trough of $1.0563 but short of last week's $1.0715 finish. Chart support was seen at the low of $1.0563, while resistance was lined up around $1.0681. The currency fared somewhat better against the euro, which recoiled to A$1.3665 from a high of A$1.3837 on doubts the European Central Bank would lift interest rates quite as aggressively as hawks had bet on.
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