After rising at the weekend to within a whisker of US80c, its highest level against the greenback in three years, the NZ dollar retreated on Monday when Consumer Price Index (CPI) data was weaker than expected.
That left investors asking if a period of profit-taking will ensue or if the NZ dollar will push on through US80c and threaten its post-float high of US82.13c.
It was at US79.34c at 5pm on Monday, down from US79.99c on Saturday morning and little changed from US79.44c at 5pm on Friday. It had drifted lower from US79.87c at 8am.
"We keep our positive week-ahead bias and watch for a sustained move into the US80s as signalling an eventual test of the post-float high of US82.13c," Westpac said.
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"Global risk sentiment remains strong, the US dollar remains unloved, and domestic fundamentals have surprised to the upside," Westpac said.
ANZ said the NZ dollar fell about 40 points when weaker than expected first quarter inflation data pushed wholesale interest rates six to seven points lower.
Statistics New Zealand reported an 0.8 per cent rise in the CPI in the March quarter and a 4.5 per cent rise for the year to March.
