The New Zealand dollar remained firm ahead of the Government's budget even though there is a risk of a downgrade by credit rating agency Standard and Poor's.
This is because global investors are shunning US dollar assets.
The NZ dollar was US61.77c at 5pm, down from the US62.37c high during the weekend, but up on US61.48c at 5pm on Friday.
The NZ dollar has risen from around US49c in March and last week rose as the US dollar fell on concerns that the US may lose its AAA credit rating.
The US dollar was steady near five month lows against a basket of currencies today ahead of US government debt auctions, which will test investor's appetite for US assets.
The NZ dollar market has considerable "event risk" this week with Fonterra announcing its 2010 season forecast on Wednesday, and the Government's budget on Thursday.
Westpac said Thursday was a pivotal day for the foreign exchange market and rated the risk of a downgrade of New Zealand by S&P as "only slightly less than 0.5".
Westpac expected the NZ dollar to trade between US60c and US63c this week with a risk of a test of the downside.
The NZ dollar rose to A79.20c from A78.95c on Friday but Westpac said a test of A77c support is possible in the next two weeks.
The NZ dollar was little changed at 0.4416 euros from 0.4415 at Friday's local close. It was buying 58.54 yen, up from 57.90 yen on Friday.
