The New Zealand dollar fell below 71 US cents after stronger-than-expected private payrolls and consumer spending data in the US and a surge in the price of crude oil added to expectations US inflation will accelerate, driving up interest rates.
The kiwi dollar fell to 70.86 US cents as at 8am in Wellington from 71.44 cents late yesterday. The trade-weighted index slipped to 78.13 from 78.48.
Crude oil jumped almost 9 per cent after the Organization of the Petroleum Exporting Countries (Opec) agreed to its first supply cuts in eight years, while the ADP National Employment Report showed private payrolls rose by 216,000 last month compared with forecasts for 165,000 jobs, and the US Commerce Department said consumer spending rose 0.3 per cent in October and was revised higher for October.
Those events combined to drive the US dollar index to a week-high on expectations the data adds to the case for a Federal Reserve rate hike this month.
"The USD has surged, likely assisted by some stronger than expected US data releases and higher yields," said Kymberly Martin, senior market strategist at Bank of New Zealand.
