The New Zealand dollar has jumped about half a cent against the US dollar on Monday.
The decision on Tuesday afternoon by Australia's central bank to keep interest rates on hold at 2.5 percent has put upward pressure on the kiwi.
Westpac market strategist Imre Speizer said the local currency had been one of the best performing this year. He said for the calendar year of 2014 the kiwi has been the top performing major currency.
At about 5pm on Tuesday the kiwi was trading at 86.96 US cents, after hitting a high of 87.14 US at about 4pm.
It was at 96.76 Australian cents, 51.48 British pence, 0.6263 euro, 88.7 yen and 5.41 renminbi.
NZ sharemarket falls for second day
The New Zealand sharemarket has fallen for the second consecutive day, the benchmark top 50 index closed down 25 points to 5175.
Craig's Investment Partners head of private wealth research Mark Lister said the market was off slightly.
He said it was a mixed day and the New Zealand market was suffering from profit taking after rising 10 percent in the year to date and coming on the back of a strong run.
Mr Lister said although electricity stocks have weakened on Tuesday Mighty River Power, Meridian, Genesis and Contact have had a good run in the last couple of weeks.
He said the property stocks made some good gains, with the like of Precinct Property, Kiwi Income Property and Argosy getting some good support.
Shares in Mighty River Power fell 3 cents to $2.28, Meridian Energy's instalment receipts slipped a cent to $1.19, while Genesis Energy share's eased half a cent to $1.84 and Contact dropped 6 cents to $5.60.
Shares in Kiwi Income Property Trust rose a cent to $1.16, Argosy Properties shares climbed 1.5 cents to 94 cents, and shares in Precinct Properties slipped half a cent to $1.05, after trading higher earlier in the day.