The Kiwi has gained nearly a cent against the US dollar and more than a cent against the Australian after the Reserve Bank maintained its hawkish stance on raising interest rates.
The central bank raised its official cash rate from 3 to 3.25 percent as expected and also left its forecasts virtually unchanged, making further rate hikes likely in July and possibly in September and December as well.
Westpac currency strategist Imre Speizer said the market had reacted strongly because it had not expected the Reserve Bank to hike rates as much during the next few years as what it had signalled in March.
"What actually happened today is the Reserve Bank stuck to its guns and published a hiking schedule which looks pretty much the same as what they published in March," Mr Speizer said.
"This caught the market on the hop and that is why they immediately bought the Kiwi dollar."
Mr Wheeler on Thursday said he expected inflation pressures to mount, and interest rates therefore needed to rise from their still relatively low levels to something more neutral.
He said he expected the economy to grow about 4 percent this year before moderating only slightly and that, even though commodity prices were easing, they would settle at historically high levels.
Just after 5pm, the New Zealand dollar was buying: 86.51 US cents, 92.24 Australian cents, 51.49 pence, 0.6387 euro, 88.31 yen and 5.38 renminbi.
New Zealand shares rose, the benchmark Top 50 Index gaining 16 points to 5195.
Murray and Co wealth management director Johnny Cochrane said the market had had a fairly flat day as a result of a sideways market on Wall Street, without any positive or negative leads.
"Also, there are no earnings out this week and that's just causing a relatively sideways market," Mr Cochrane said.
"Some of the stronger stocks today were Contact and TradeMe. Quite a strong rally from New Zealand Oil & Gas and also Wynyard Group, who won a contract from Tatts Group in Australia for their compliance product."
Contact Energy shares gained 16 cents to $5.46, New Zealand Oil & Gas rose 4 cents to 81 cents, TradeMe put on 6 cents to $3.49 and Wynyard climbed 7 cents to $2.27.