The New Zealand dollar has moved off multi-year lows against the US and Australian dollars as well as the Japanese yen as the current level of the NZD/USD had been termed as the optimum one for the Kiwi dollar according to policymakers.
New Zealand Prime Minister John Key has previously said that 0.65 is a "Goldilocks" level for the NZD/USD pair. It traded as low as 0.6498 on 16 July before rebounding to 0.6591 on Monday (20 July).
Analysts expect the Kiwi to consolidate around the current level but the Reserve Bank of New Zealand policy decision scheduled for Thursday (23 July) could be watched for any surprise impact on the currency.
Many analysts believe that the renewed downside pressure on oil prices as well as falling global dairy prices will work as catalysts for additional policy easing by the RBNZ in the near future.
With such a move almost factored in, the price action upon the rate cut could be limited, analysts say. Charts suggest 0.6448 as the immediate support, a break of which will bring psychological levels like 0.6400 and 0.6300 into focus.
If the current level is endorsed by the central bank too as the optimum level, then the pair could enter a sideways track of 0.6500-0.6800.
The NZD/JPY rose to 81.85 on Monday from last week's low of 80.46, its lowest since November 2013.
Against the Australian dollar, the Kiwi strengthened to 1.1186/A$ from the previous close of 1.1298. The AUD/NZD cross had rallied to 1.1429 earlier this month, which was the NZ currency's weakest since November 2013.