The New Zealand dollar hovered at its highest in nearly three years early on Friday, having taken on a starring role in a subdued currency market as investors sought higher-yielding currencies.
The kiwi rose as far as $0.8790, a high not seen since early August 2011, before edging back to $0.8780. It was near a post-float high of $0.8842. Traders said the move highlighted the hunt for yield as investors looked for better returns in a generally low global interest rate environment.
With the Reserve Bank of New Zealand in a tightening cycle, the kiwi has become somewhat of a beacon to many investors. The RBNZ’s cash rate is currently at 3.25 percent, among the highest in the developed world.
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