The NZ dollar declined against its major counterparts in the European session on Friday, as progress in vaccinations and the approval of the stimulus package lifted U.S. bond yields, weighing on European shares.

U.S. President Joe Biden signed the $1.9 trillion stimulus package into law on Thursday, enabling Americans to receive direct payments by this weekend.

In his televised address, Biden pledged aggressive action to speed vaccinations and move the country closer to normality by July 4.

The 10-year Treasury yield hit 1.6 percent as investors assessed the prospect of higher inflation.

The latest survey from BusinessNZ showed that New Zealand's manufacturing sector continued to expand in February, albeit at a slower pace, with a Performance of Manufacturing Index score of 53.4.

That's down from the upwardly revised 58.0 in January (originally 57.5), although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The International Monetary Fund cautioned that New Zealand housing market is likely to undergo a pronounced correction.

Concluding the Article IV discussions, IMF staff said rising speculative demand for housing, along with historically low interest rates and structural housing supply shortages, is amplifying the housing cycle and heightens financial stability and affordability concerns.

The kiwi fell to more than a 2-week low of 1.0807 against the aussie, from a high of 1.0765 set in the Asian session. On the downside, 1.10 is possibly seen as the next support level for the kiwi.

The kiwi declined to 2-day lows of 0.7160 against the greenback and 1.6643 against the euro, off its early highs of 0.7233 and 1.6566, respectively. If the kiwi extends decline, 0.70 and 1.72 are possibly seen as its next support levels against the greenback and the euro, respectively.

The NZ currency touched 78.03 against the yen, down from a high of 78.61 seen at 8:30 pm ET. The kiwi is poised to target support around the 76.00 mark.

Looking ahead, Canada jobs data and U.S. PPI for February and University of Michigan's preliminary U.S. consumer sentiment index for March will be featured in the New York session.