The New Zealand dollar peaked to a 26-year high against the U.S. Dollar in the first trading session of the week in Asia. For the past two weeks, the kiwi has been steadily rising, boosted by a broadly weaker greenback.
Buying demand for earthquake reinsurance payments which ensued from the devastating earthquake in Christchurch last February helped the kiwi’s rise.
Meanwhile, positive fundamentals were a key driver after a report showed the nation’s trade surplus widened by almost twice economists’ estimates to a record in April.
NZD has risen 8.8 percent against the USD since February 25, to become the second-best performer among 16 major counterparts, as Asian demand drove up prices for New Zealand’s milk, lumber and meat exports.
Meanwhile expectations for a rate rise by the New Zealand Central Bank gave an additional boost.
NZDUSD hit its new record high at 0.8217 in early Asian trading. This is the highest level since the NZ Dollar was floated in 1985.
Profit-taking made the pair dip down to 81.64 in early European session trading.