The Australian and New Zealand dollars took a break against the greenback on Friday following recent hefty gains but held near four-year peaks on the yen, with investors focused on upcoming US jobs data.
The Aussie eased back to $US1.0439, from $US1.0463 early and an overnight peak of $US1.0526, the highest since December 19. The New Zealand dollar slipped 0.4 per cent on the day to $US0.8245.
The Antipodean currencies fell prey to a broadly stronger US counterpart after minutes from the US Federal Reserve policy meeting revealed some members wanted to slow asset purchases earlier than previously thought.
"The dollar is stronger pretty much against everything ... it has been a US dollar positive story," said RBC strategist Michael Turner.
Joseph Capurso, a strategist at Commonwealth Bank of Australia, said some of the FOMC members are rethinking the need for quantitative easing because of its costs.
"They are worried about financial stability and the size of the Fed's balance sheet, which are not good things, but the US dollar rose anyway," he said, seeing the Aussie possibly slipping to $1.0350 next week.
Selling of the Aussie accelerated after breaking key levels. It was now sitting around the 50 per cent retracement mark of the $1.0345-$1.0527 rally, with next support seen at $1.0414, the 61.8 per cent of the same move. Resistance was found at $1.0484.
Still, the Australian dollar's downside was seen limited thanks to strong iron ore prices, which powered up further to $149.80, the highest since October 2011.
Prices are now up 73 per cent from the lows in September, a big boon to national income as iron ore is Australia's single largest export earner.
The Aussie has gained 0.6 per cent so far this week, after a US fiscal agreement which temporarily averted huge tax increases and spending cuts fuelled a rally in risk assets.
Charts showed the kiwi dollar was in oversold territory, with the December 31 low of $0.8196 seen as the next target and Wednesday's high of $0.8397, near term resistance.
The NZ currency gained 6.5 per cent last year against the dollar as interest rates there remained well above those in most other developed nations. Also aiding are expectations of stronger growth this year with the help of earthquake rebuilding in Christchurch.
The currency found extra support from strong dairy prices and Boxing Day spending.
A WOUNDED YEN
The Antipodeans hovered near multi-year highs against the yen, recently battered on expectations its central bank will take ever bolder measures to kickstart its economy.
The Aussie was up 0.4 per cent on the day at 91.54 yen, within striking distance of 91.77, a level last seen in September 2008. It was on track to post its largest weekly gain since June with a rise of 2.7 per cent.
The kiwi held steady at 72.20, having climbed as high as 73.14, this week a peak not seen in over four years. It gained 20 per cent last year.
The Antipodeans kept large gains on the euro, which suffered a reversal this week. The common currency last stood at $1.2482 , well off a three-month peak of $1.2807 touched last week, while it fetched $NZ1.5815, having shed 4.5 cents in one week.
The next flash point is US employment report later on Friday, which is expected to show employers added 150,000 jobs to their payrolls in December. Earlier, the ADP National Employment Report showed the private sector added 215,000 jobs last month.
The New Zealand government bond prices followed US Treasuries lower, with local yields up around 4.5 bps.
Australian government bonds slipped near multi-month lows with the three-year contract down 0.08 points to 97.160, having dropped to 97.130, its lowest since August.
The 10-year contract also shaved 0.08 points to 96.585, after it touched an eight-month trough of 96.545. Charts show 96.48 is the next big level, the 50 per cent retracement of the March-May rally.