The productivity commissions of Australia and New Zealand are asking for public comment on a proposal to have a single currency for the two Oceania nations.

A discussion paper identified lower transaction costs for business as among the potential benefits of a single currency, citing the example of the euro. But some issues need to be addressed such as amendments to business reporting requirements and consumer laws.

One downside noted in the discussion paper is that business cycles and economic changes in the two nations may affect them differently, and they could suffer for not having independent exchange rates, as in the euro zone.

Australia remains New Zealand's largest trading partner, but the latter is Australia's fifth largest trading partner only.

Over the past few months, the Australian dollar continued to gain strength, causing Aussie manufacturing firms to complain of the impact of the strong currency on their business operations.

However, with the second consecutive month of unexpected trade deficit in February logged by Australia, the New Zealand dollar reached a fresh six-month high against the Australian dollar.

On Wednesday, the kiwi went up as high as 79.49 Australian cents which is the highest level since October 7. At 5 p.m., the kiwi traded 79.45 cents from 79.11 cents on Tuesday.

Australia's $480 million trade deficit pushed the country's currency down against other currencies as part of the growing negative effect of China's slowdown on Australia's exports.

"China's slowing is going to hurt Australian exports, which have been their saving grace," News 9 quoted Westpac Banking market strategist Imre Speizer, who added that the trend of the kiwi's strength against the Australian dollar "is still intact and had gone quite a long way."

The Westpac strategist added that the kiwi probably has another cent to go. Speizer said the gap between the Australian and New Zealand exchange rates would continue to narrow significantly, which would reduce the former's interest rate advantage over the latter.

"The kiwi-aussie cross has actually been the stellar performer today with quite a sharp move up, on the weakness in the Australian dollar on the expectation the Reserve Bank of Australia would cut rates next month," stuff.com.au quoted HiFX Trading Director Mike Hollows on Wednesday.