The New Zealand dollar is stronger against the currencies of all its major trading partners after a very volatile 24 hours.
ASB Bank head of external foreign exchange sales Tim Kelleher says a decision from the Australian central bank and strong jobs figures in New Zealand have been driving the currency.
He says the Reserve Bank of Australia on Tuesday took away its easing bias which saw a very short currency market abruptly correct itself.
Mr Kelleher says there was a 2 percent rise in the Australian dollar on Tuesday night, and on Wednesday the New Zealand dollar, which rallied on the back of the Australian, gave back a few of those gains.
He says Labour Force Survey data showed a steady improvement and the unemployment rate fell to 6 percent from 6.2 percent in September last year.
At about 5pm on Wednesday, the Kiwi was trading at 82.05 US cents compared with 80.96 cents at the same time on Tuesday and at 92.3 Australian cents, up from 91.46 cents.
It was also stronger at 50.24 British pence, 0.6074 euro and 83.29 yen.
Sharemarket gains 5 points
New Zealand shares nudged higher on Wednesday, the benchmark Top 50 Index gaining 5 points to 4808.
However, the index has lost 67 points so far this week.
Craigs Investment Partners head of wealth research Mark Lister says markets around the world still seem fragile.
"We've seen a bit of stability return to the market, particularly from the US overnight which had an up day, but it certainly does feel quite volatile out there still."
Mr Lister says the markets are probably still questioning where the US economy is going from here after a weaker manufacturing survey.
He says a couple of the New Zealand stocks which had the largest falls have bounced back.
Xero shares gained 95 cents to $38.75 while Diligent share rose 17 cents to $4.50.
Telephone lines company, Chorus, actually gained 3 cents to $1.38 after Standard & Poor's said it is keeping the company's credit rating on negative watch.
S&P wants to see how Chorus mitigates the impact of the Commerce Commission's decision last year forcing the company to slash its wholesale prices.