The Australian dollar reached US99.18c ($NZ1.32) early yesterday before the prospect of an interest rate hike by the Reserve Bank of Australia disappeared.
By midday, the Australian currency was back down to US98.37c and was expected to close lower before the US jobs data was released.
The US99.18c mark was the highest the currency had traded against the US dollar since August 3, 1982, when it reached US99.53 while on a fixed exchange rate.
"It was a bit of a wild ride for the Aussie overnight," BNZ currency strategist Mike Jones said.
"But its gains were fleeting. Overnight we saw a bounce-back in the US dollar and that knocked the Aussie off its perch."
Better-than-expected unemployment numbers in Australia sent "the unit to the moon" on Thursday after the figures were interpreted as giving the Reserve Bank of Australia cause to lift the cash rate in November.
Australian Bureau of Statistics data showed the country added 49,500 jobs in September, well above the 20,000 forecast by economists. The jobless rate stayed steady at 5.1%.
Mr Jones said there were a few factors at play in the sudden rise of the US dollar on Thursday night, which had been weakened under the weight of poor data on the health of the US economy over the past month.
Craigs Investment Partners broker Peter McIntyre said New Zealanders had to get used of living in the new "normal", which was a higher currency rate for the next two years - at least.
"The major-league currencies are generally going to be weaker but for us, we will be living with a high dollar."
There were some positive aspects for New Zealand in what would normally be the start of a difficult time for exporters, he said.
While the kiwi was higher against the US dollar, the euro and the pound, it was weaker against the Australian currency and Australia was still New Zealand's largest export market.
That would provide a "saving grace" for the country's productive economy, Mr McIntyre said.
Australia had a strong mining economy, but it was not the only part of the economy doing well.
Farming was booming, thanks to a good rainfall season.
Other contributing factors included Australian exports to Asia growing, a booming port sector, a strong banking system and compulsory superannuation.
"It's a multiplier effect. Outside the likes of China, the Australian economy is one of the best performing in the world," he said.
In contrast, unemployment in the US was running at 9.6% and there was still concern about growing unemployment.
Financial markets were looking for further stimulus from the Federal Reserve to help ignite growth, he said.
Household spending was lifting, but it was not fast enough for the Fed.
Jobless claims fell in September, but the spotlight was on last night's larger non-farm payrolls.
The report was expected to show payrolls were unchanged in September, but the release had bigger implications for a market hoping weak data would spur the Fed to take further steps to boost the economy.
"I don't see any end of the easing in the short term. The Fed has two options - deflation and inflation and inflation is the best when they are printing money. It is the easiest way for them to pay back the stimulus package as a dollar today is worth more than a dollar tomorrow," Mr McIntyre said.
The US reporting season was started yesterday by Alcoa, the largest US aluminium producer, which reported a lower third-quarter profit.
The reporting season would give the best understanding of the state of the US economy, he said.
