The New Zealand dollar is leading the world, powering to a 13-month high against the greenback and a 12-1/2-year high against the British pound.

By 5pm yesterday the NZ dollar was buying US71.35c from US70.57c at the same time Wednesday. The high in the domestic session was US71.55c, near the peak in overnight trading of US71.57, which was the best since August last year.

"If you line all the currencies up, it is the aussie and kiwi leading," said Imre Speizer, Westpac's senior market strategist. Since the rally started in March, the New Zealand dollar was the top performing of major and minor currencies in the world, he said.

"We continue to make new highs. Over the next week we feel very confident about the bullish case," he said.

Because the currency has had such a big run up corrections were inevitable.

The NZ dollar was not only strong against a weak US dollar, it was strong against a range of currencies.

It reached a 12-1/2-year high against the British pound at 43.35p on Wednesday night. It was 43.26p at 5pm yesterday from 42.85p at the same time Wednesday. 

"Sterling has done better than the US but it has lagged the euro and the reason for that is they are still chucking a lot of liquidity into the economy," Mr Speizer said.

BNZ Capital senior strategist Danica Hampton said the pound was tending to lag gains seen in other currencies.

Against the Australian dollar, the NZ dollar rose to A81.59c from A81.46c Wednesday, while the trade weighted index lifted to 64.83 at 5pm yesterday from 64.31 Wednesday.

The US dollar has fallen against a basket of currencies amid optimism about a global economic recovery, which eroded demand for the greenback as a safe haven.

Shares on Wall Street rallied as increased industrial production and a pickup in mergers and acquisitions reinforced hopes the economy was gaining speed.

The NZ dollar was up to 0.4845 euro from 0.4807 at 5pm yesterday, and lifted to 65.02 yen from 64.24.