The dollar remained at over US72c yesterday, at levels inching close to its nine-month high of US73c on the back of stronger sentiment concerning the strength of the global economy which alleviated fears of a double-dip recession.
On Saturday, it hit US72.90c and at 5pm yesterday had eased slightly to US72.77c.
The kiwi yesterday eased almost US0.5c against the euro, from 56.75 to 56.31 at mid-afternoon, but remained within recent trading bands against the Australian dollar, closing at A81.33c.
The New Zealand Herald reported the Economist found that at an exchange rate of US71.90c, a New Zealand Big Mac was 4% cheaper than in the United States, which implied the New Zealand dollar was 4% below fair value against the US dollar.
The measure found Norway's kroner was 93% overvalued and the Chinese yuan was 48% undervalued, a sore point with the US which claims the Chinese Government is keeping its exchange rate low to make their exports competitive.
ANZ chief economist Cameron Bagrie said while Reserve Bank governor Alan Bollard is expected to increase the official cash rate on Thursday, the tone of his comments on the economy would dictate the direction of the currency.
He expected that statement to be "a little downbeat" due to soft data as households deleveraged.
Mr Bagrie expected few surprises in the New Zealand-Australian cross rate due in the coming month, in part because of the Federal elections taking precedence.
He said the New Zealand-United States rate could stabilise or start to decline in the coming months as there was little economic reason for it to rise above US73c.
