Kiwi dollar weakens off recent highs

The New Zealand dollar fell off recent highs yesterday as investors proceeded to book profits on strong gains, before recovering ground overnight amid growing risk appetite.

• The kiwi still remains supported by a lift in appetite for high yielding currencies, as the wave of optimism about an economic recovery continues.
  
• This suggests the kiwi could make further gains if the momentum continues.
  
• However, analysts have warned that some indicators suggest that the kiwi is already overvalued.