The New Zealand dollar has regained ground lost after the Reserve Bank moved its policy to neutral late last month, as investors are attracted to the country's higher yield in a global economy where other central banks are cutting rates.

The kiwi was trading at 74.22 US cents at 8am in Wellington, up from 73.70 cents at 5pm yesterday and close to the 74.44 cent level it was trading at before the Reserve Bank dropped its bias for higher interest rates on Jan. 29 and moved its policy to neutral. The trade-weighted index advanced to 76.94 from 76.46 yesterday.

The local currency dropped to its lowest in four years after the Reserve Bank moved its policy to neutral as investors speculated New Zealand could follow Australia and other central banks and cut the benchmark interest rate. However the kiwi has recovered since Reserve Bank governor Graeme Wheeler's Feb. 4 speech reiterated that the official cash rate is likely to remain on hold for some time.

"The TWI is back above where it was before the January 29th RBNZ OCR review, which many, including ourselves, saw as a triumph in terms of rebalancing the mix of monetary conditions," ANZ Bank New Zealand senior rates strategist David Croy said in a note. "The trouble is, when everyone else is cutting rates, standing your ground is considered to be going against the grain."

ANZ said 17 central banks around the world have cut interest rates so far this year.

Today, traders will be eyeing Chinese inflation data for January.

The New Zealand dollar was little changed at 94.86 Australian cents from 94.84 cents yesterday ahead of a report on Australian business confidence.

The kiwi rose to 65.47 euro cents from 65 cents yesterday, increased to 48.73 British pence from 48.31 pence and advanced to 87.99 yen from 87.56 yen.