The New Zealand dollar rose toward $0.58, as the US dollar softened after the Federal Reserve stood pat on rates, while upbeat business survey at home also provided support for the currency.
The greenback declined after the Fed held its benchmark interest rate steady for the fifth consecutive meeting, despite persistent inflation pressures and a recent surge in energy prices.
On the domestic front, the ANZ Business Confidence Index jumped to 56.1 in July from 36.6 in June, as firms became more optimistic about the economic outlook.
However, sentiment weakened toward the end of the month as renewed fighting in the Middle East triggered volatility in oil prices.
Markets continued to expect the Reserve Bank of New Zealand to raise its cash rate again at its September meeting, following higher-than-expected inflation data last week.