Wellington, May 26 NZPA - The New Zealand dollar found more yield demand overnight Friday as the greenback slid further against a basket of major currencies.

From US78.56c against the US dollar at 5pm on Friday, the kiwi got to a 2-1/2-week high just shy of US79c early on Saturday, before easing. By 8am today it was down to US78.51c.

The NZ dollar spiked up on Thursday on a much more stimulatory budget than anticipated, and largely held the gains despite comments from Finance Minister Michael Cullen on Friday morning that "the market reaction was excessive".

Bank of New Zealand currency strategist Danica Hampton said the NZ dollar climbed about 1.4 percent against the US dollar last week, 1.3 percent against the Australian dollar and about 0.9 percent on a trade weighted basis.

Crude oil had taken centre stage during week, with prices above $US130 a barrel for most of it, as the US dollar weakened against all the major currencies.

Rising crude oil prices, fears about stagflation and falling US stock markets weighed on risk appetite on Friday night, prompting investors to buy safe-haven currencies such as the yen, which strengthened against higher yielding currencies such as the kiwi.

By 8am today, the NZ dollar was buying 81.07 yen, down from 81.75 at Friday's local close.

The kiwi eased against the euro and Australian dollar.

At today's local open it was buying A81.82c against the aussie from A82.05c at 5pm Friday, while against the euro the NZ dollar slipped from 0.4994 to 0.4980. The trade weighted index was 69.53 at 8am today from 69.72.

With both the US and British markets out for holidays on Monday, the start to this week is expected to be fairly slow.

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