The New Zealand Dollar opens nearly one cent lower against the worlds reserve currency as strong US data triggers a selling spree of G10 currencies. The NZD/USD opened on Wednesday around the 0.6590 level and you can pretty much draw a straight line down on the chart through the Asian, European and North American session where the Kiwi closed the day at 0.6510.
Markets ignored local data - ANZ Commodity Price index, which dropped for the fourth consecutive month down 1.8% in September pushing annual growth further into negative territory, at -3.0% year-on-year.
The main highlight overnight was September ISM non-manufacturing data index rose from 58.5 in August to 61.6 in September, the highest since 1997. There was broad-based strength in the detail and suggests that there continues to be solid underlying momentum in the US services sector.
The move triggered a sharp selloff in US Treasury yields with the 10y rate climbing to its highest level in 7 years while the 30-year tenor ascended above 3.30% for the first time in four years. Adding to USD strength was U.S. ADP payrolls data reporting private sector employers added 230,000 jobs in September, well above economists' expectations. Economists had expected the ADP nonfarm payrolls report to show a gain of 187,000 jobs.
Looking ahead, there are no local data releases and the multi-year lows of 0.6501, set last month, are now within close reach.