The New Zealand dollar is headed for a 1.4 percent gain this week after Reserve Bank governor Graeme Wheeler quashed expectations for a rate cut, singling out the country's inflationary pressures as his No 1 bugbear.
The kiwi traded at 83.18 US cents at 5pm in Wellington from 83.12 cents at 8am and 82.87 cents yesterday. The trade-weighted index climbed to 74.42 from 74.03 yesterday, and is heading for a 1.1 percent weekly gain.
Traders have wound back their expectations for a rate cut after Mr Wheeler kept the official cash rate at 2.5 percent and told reporters it will stay there until the end of 2013 as he keeps tabs on an Auckland property market that is heating up and building inflation pressures in the Canterbury rebuild.
US non-farm payrolls are not expected to grab too much attention when they are released later today in Washington DC, because of the impact of Hurricane Sandy, though investors will continue to keep tabs on the ability of US legislators to make any progress on stalled talks to prevent $US607 billion of automatic tax hikes and spending cuts from kicking in next month.
"The part of the economy most likely to stimulate with cuts is the part that least needs it," says Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. The trans-Tasman currencies "are going reasonably well into year-end and people aren't too worried about the fiscal cliff at this stage".
Investors have shifted their focus to next week's Federal Open Market Committee meeting, where the US central bank may replace Operation Twist, a programme of selling shorter-dated debt and buying bonds with longer maturities.
Chinese industrial production and retail sales figure will also be watched this weekend as investors gauge the health of the world's second-biggest economy.
The kiwi jumped to 64.15 euro cents from 63.50 cents yesterday, and advanced to 51.80 British pence from 51.52 pence.
New Zealand's currency rose to 79.36 Australian cents from 79.19 cents yesterday, and gained to 68.61 yen from 68.38 yen.