The benchmark 10-year US Treasury briefly pushed above 3.23 per cent overnight, its highest level since 2011. It is now hovering around 3.19 per cent after strong data upped the chances of more US rate increases.
Earlier in the week, the greenback also got a solid lift when Fed Chair Jerome Powell said interest rates "may go past neutral, but we're a long way from neutral at this point, probably," according to CNBC.
"After the Fed endorsed the robust US economy, the market seems to have given up trying to fight against it. I think it's been a bit of a reality check week that the US economic strength isn't going to go away," said Martin Rudings, senior dealer foreign exchange at OMF.
Markets are now waiting for US jobs data, with non-farm payrolls tonight likely to show the US added 181,000 jobs last month.
Rudings said the kiwi could dip as low as 63.50 US cents in the near term, in particular if the payrolls number is stronger than expected.
The kiwi dropped to 49.68 British pence from 50.20 pence yesterday and declined to 56.17 euro cents from 56.58 cents.
New Zealand's dollar traded at 91.51 Australian cents from 91.59 cents yesterday and fell to 4.4395 Chinese yuan from 4.4601 yuan. It dropped to 73.62 yen from 74.18 yen.
New Zealand's two-year swap rate was unchanged at 2 per cent, while the 10-year swap rose 1 basis point to 2.89 per cent.
