The US dollar traded close to its lowest level this year against a basket of currencies after update economic data from around the world lifted investor's appetite for risk.
The euro, pound sterling, and commodity-linked currencies like the New Zealand and Australian dollars held firm near multi-month highs against the US dollar.
In early morning trading yesterday, the New Zealand dollar touched US67c.
The Australian dollar hit a 10-month high against the yen during the day.
The NZX-50 closed last night at 3092, up nearly 45 points - after being up 60 points in the morning - and the dollar was trading at US66.81c.
The cause for the bullish US sharemarkets and the falling US currency was data on the manufacturing sector which underscored optimism that the economy was in recovery.
The broad Standard & Poor's index closed above 1000 for the first time in nine months. The technology rich Nasdaq closed above 2000 for the first time since October in an extension of the markets recent rally.
The Dow Jones Industrial Average shot up nearly 115 points, or 1.25%, to 9286.
Forsyth Barr broker Peter Young said the US reporting season had started well, with the improved sentiment flowing through to New Zealand market.
The New Zealand market was going well now but the country's reporting season was only due to start next week.
"The US is really leading the way. I just hope the New Zealand sentiment doesn't miss the mark. What we are seeing is based more on sentiment than hard facts."
Latest statistics from the New Zealand Stock Exchange showed the market rose 7.9% in July on very little information, he said.
Sky City Entertainment, Abano Healthcare and Ryman had reported improved forecasts or profits but the "heavyweights" of the market were still to report.
In July, Fisher & Paykel Appliances was the best performed company with its share price rising nearly 30%.
Cavalier and Nuplex both rose more than 26% in value with Steel & Tube rising the least of the top 12 on 12.5%.
The rise in the dollar should be hurting exporting companies but Fisher & Paykel Healthcare, an exporter, was "flying along against the trend", Mr Young said.
"All this is interesting but I hope we are not getting too carried away."
