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The New Zealand dollar just keeps getting more reasons to rise after the rate hike. This time it is a bigger trade surplus than expected and a hawkish comment from a member of the RBNZ.

NZD/USD reached the highest level in 29 months, peaking at 08679 before consolidating the gain. Can it break 0.87?

One-two punch

New Zealand reported a trade surplus for the fourth consecutive month, and it exceeded expectations for the second month in a row. At 818 million, February 2014’s surplus is the highest since April 2011. Expectations were for a more modest figure of around 600 million after last month’s 286 million (revised down from 306 million). The surprise gave the kiwi the first boost.

Speaking at the  Credit Suisse Asia Investment conference, the Reserve Bank of New Zealand’s Grant Spencer said that the rebuilding of Christchurch will add to the risk of inflation. This comment, expressing more inflation worries from the central bank, certainly struck a tone and gave the kiwi the extra push to reach the peak.

NZD/USD levels

NZDUSD March 27 2014 at highest since 2011 technical weekly forex chart for currency traders

At 0.8679, NZD/USD broke above the April 2013 high of 0.8676. The fresh peak is the highest since August 2011, when NZD/USD reached a multi-decade high of 0.8842.

At the time of writing, the kiwi is trading at 0.8659, below the peak. Support lies at the previous 2014 high of 0.8640, followed by 0.8573. For more, see the NZD to USD forecast.