The US trade-weighted index was 103.13 after climbing to 103.82, the highest since December 2002.
The highly-anticipated US jobs report is due on Friday and there are concerns about how strong the non-farm payrolls data will be.
US factory activity accelerated to a two-year high in December amid a surge in new orders and rapidly rising raw material prices.
That indicated some of the drag on manufacturing from prolonged dollar strength and a slump in oil prices was fading, Reuters reported.
The US dollar was also helped yesterday when major stock markets made a solid start for 2017 and debt yields moved up after upbeat economic information from China and Europe.
Oil prices fell after reaching an 18-month high, partly as a result of the stronger dollar. Traders said crude prices were buoyed earlier by the hopes a deal, which started on January 1 between Opec and other big oil exporters, to cut production would drain a global supply glut.
The New Zealand dollar traded mostly lower yesterday because of the rise in the US currency.
As the US president-elect, Donald Trump, continued to promise tax reform and infrastructure spending, the US Federal Reserve had indicated a more aggressive track of rate hikes in the year ahead, lifting yields on bonds and stoking demand for the greenback.
Westpac currency strategist Imre Speizer said the US dollar was still trending upwards and as long as it remained that way, the kiwi would be range-bound.
''The year ahead does look pretty good for the US dollar.''
In Australia, the dollar remained steady against the US currency after rebounding on Tuesday on positive Chinese and Australian manufacturing data.
Scotia Capital currency strategist Shaun Osborne told Reuters job growth in the US appeared to be increasing, orders were picking up strong and prices were increasing.
''That suggests the [Fed] is going to have to remain active in this kind of environment. So this, on the whole, is a generally constructive set of data for the dollar here in time of the year where typically, the dollar does quite well.''
