KEY POINTS:
The dollar eased back from a new overnight high but remained above US78c yesterday.
During the night, the kiwi peaked at US78.80c, a new 22-year high since being floated, but fell away to US78.21c at 5pm yesterday, near Thursday's US78.16c close.
"We're pretty much back to familiar trading ranges," ANZ Investment Bank chief dealer Murray Hindley said.
Yield advantage kept the kiwi strong against other major trading partners. It trumped the Australian dollar at A91.29c, compared with A91.16c at Thursday's close, and flexed its muscles against the yen at 96.33 (95.97).
The trade-weighted index hit another record high, peaking at 75.63 (75.49).
The ANZ said the kiwi's swift retreat came as the US dollar gained on the strength of overnight data.
The greenback gained against the euro and the yen after an unexpected rise in United States services sector activity eased concerns that the Federal Reserve might have to cut interest rates this year to shore up a slowing economy.
Overnight, the European Central Bank decided to keep rates on hold at 4 per cent but suggested more hikes were likely.
But the US dollar lost strength against the pound after a rate rise by the Bank of England to 5.75 per cent with inflation risks to the upside. The greenback hit a 26-year low against the pound on Wednesday.
Hindley said the kiwi would now take the lead from US non-payroll figures. Local data next week includes a quarterly survey of business opinion on Tuesday and retail sales on Friday.
- NZPA
