By Wayne Cole

SYDNEY, May 15 (Reuters) - The Australian and New Zealand dollars slipped on Friday as the greenback swung higher with Treasury yields, though the Aussie did hold weekly gains against most other peers after hitting a 35-year peak on the yen.

Hot U.S. inflation data and a solid retail sales report saw short-term U.S. yields touch a 12-month high as markets priced in a 45% chance the Federal Reserve could hike by year-end.

Global markets were also spooked by a fresh rise in oil prices amid concerns the Strait of Hormuz would not be fully opened for some time to come.

That lifted the U.S. dollar across the board and pushed the Aussie down 0.4% to $0.7187 AUD=D3, on top of a 0.5% drop overnight. The turn away from a recent four-year peak of $0.7277 puts the focus on support around $0.7102.

The kiwi dollar slipped 0.5% to $0.5880 NZD=D3, having already shed 0.4% overnight in its fourth session of losses. Support comes in around $0.5858 and $0.5816.

The Aussie was still up 0.4% on the yen for the week at 113.94 AUDJPY=R, and made fresh multi-month tops on the euro, sterling and Swiss franc.

"AUD's resilience, despite the unresolved Gulf conflict, suggests markets view the shock as more inflationary than recessionary," said Carol Kong, a currency strategist at CBA. "This has shifted market focus on interest rate differentials which currently favour AUD."

The Reserve Bank of Australia has already lifted rates by 75 basis points to 4.35% and markets are wagering heavily on another hike as soon as August. 0#AUDIRPR

"However, we expect central banks in other advanced economies to start raising interest rates in coming months, narrowing the yield advantage," Kong added. "We expect AUD/USD to peak soon and decline to $0.64 by year-end."

The Reserve Bank of New Zealand has so far resisted pressure for a rate rise given the local economy has only just emerged from recession and has plenty of spare capacity.

Yet markets imply a 40% chance it might raise the 2.25% cash rate at its next meeting on May 27, and are fully priced for 2.5% by July. 0#NZDIRPR

"The sharp rise in fuel prices means inflation is on course to rise well above 4%," said Satish Ranchhod, a senior economist at Westpac. "Interest rates will need to rise, but the question is how soon and how quickly. We expect a series of rate hikes from September."