The New Zealand dollar touched a three-year high at just under US80c on Saturday, underpinned by strong commodity prices around the world.
However, continued volatility in global markets and economies and investor sentiment will determine what happens in the months ahead.
The weekend gains to US79.99c were yesterday eroded by the release of inflation data, booking a 0.8% rise in the consumer price index for the past quarter, and the kiwi then slipped almost half a cent to trade around US79.5 by about midday yesterday.
Global spot gold also rallied late last week, as inflation fears and rising oil prices pushed bullion to a fifth consecutive week's record of $US1488 ($NZ1869) an ounce.
Gold prices have almost doubled since the United States central bank, the Federal Reserve, cut interest rates to the bone in 2008 in an attempt to shock the economy back to life after the worst financial crisis since the Great Depression.
In the wake of Japan's earthquake, the Australian dollar and the kiwi weakened off appreciably, with the kiwi plunging briefly to a two-year low of US71.25 as money was repatriated to stricken Japan in mid-March.
However, the kiwi had since "gone from strength to strength" to the weekend high of almost US80c, ASB senior economist Chris Tennent-Brown said yesterday.
"The New Zealand and Australian dollars have been lifting since then [mid-March] in one-way traffic . . . with commodities at record prices," he said.
The ASB's weekly commodities index has hit consecutive record highs in recent weeks and commodity prices "appeared set to stay strong".
Mr Tennent-Brown had been expecting the kiwi to be "drifting down" toward US75c, but if commodities remained up in value then a range of US76c-US80c may be maintained in the months ahead.
He did caution that European debt, Middle East tensions and the possibility of interest-driving rate hikes in both the United Kingdom and the US could undermine the kiwi's strength.
"Investors could see the wind taken out of the sails of currencies," he said.
