The New Zealand dollar, down from last week's giddy heights, may re-test its recent highs as the relative strength of the economy draws offshore funds and investors wait to hear what the central bank governor tells harried exporters this week.
The kiwi recently traded at 84.45 US cents from its high last week of 85.33 cents and the trade-weighted index was at 76.92, down from last week's post-float high of 77.46.
The local currency may trade in a range of 83 US cents to 86 cents, according to a BusinessDesk survey of six traders and strategists, with most seeing it higher by the end of the week.
New Zealand has enjoyed a run of positive economic indicators, with consumer confidence, retail sales and even manufacturing showing strength.
That contrasts with a European economy that endured five quarters without growth, a potential triple-dip recession in the UK and the US "muddling along in fiscal denial", says Peter Cavanaugh, senior client adviser at Bancorp Treasury Services.
"What we're seeing is the great rotation – investors moving out of safe havens and into riskier and higher-yielding assets" such as the kiwi, he says.
In a sign that offshore investors are yield-hungry, central bank figures show foreign investors held 64.8 percent of New Zealand government securities on issue last month, up from 56.7 percent a year earlier.
New Zealand 10-year government bonds are yielding about 3.91 percent, or about 191 basis points more than comparable US Treasuries and 314 basis points over Japanese 10-year bonds.
The release calendar is less cluttered this week. The BNZ-Business New Zealand Performance of Services Index for January rose 1.1 points to 52.6. New orders climbed to 57.6 from 55.4 in December and sales rose to 53.5 from 51.6, today's report showed.
That follows the Performance of Manufacturing Index last week rising to an eight-month high of 55.2.
The biggest risk even locally this week is likely to be Reserve Bank governor Graeme Wheeler's address to the Manufacturers and Exporters Association on Wednesday. The session is closed to the media, though speech notes are to be made available.
"People will be a bit cautious ahead of that," says John Horner, currency strategist at Deutsche Bank in Sydney.
Even with the improving data, he doesn't see a case for the RBNZ moving sooner on the official cash rate. The New Zealand dollar "is one of the best yields around but maybe it has gone a bit too far, too fast".
On the global calendar this week, the Reserve Bank of Australia and the US Federal Reserve release minutes of their last policy meetings, though Derek Rankin of Rankin Treasury Advisory says he sees little emerging to change market views.
"There are so many good reasons for the New Zealand dollar to be lifting. The Americans are printing and the new Bank of Japan governor will be looking to print straight away as well."
He does not expect further easing from the RBA with the cash rate at 3 percent, the same level it dropped to in the wake of the global financial crisis in 2009. "It is hard to see them doing much more."