New Zealand dollar little changed after limited dip in dairy prices

Wednesday 17th June 2015

The New Zealand dollar was little changed, holding below 70 US cents, after a relatively small decline in dairy prices on the GlobalDairyTrade platform and little sign of progress in Greece's talks with creditors.

The kiwi traded at 69.84 US cents at 8:30am in Wellington, from 69.88 cents late yesterday. The trade-weighted index was at 72.90 from 72.89 yesterday.

Dairy product prices fell to the weakest levels in almost six years overnight, with the GDT average winning price down 1.3 percent to US$2,409. Yet whole milk powder, the biggest product by volume that Fonterra sells through the auction, fell only 0.1 percent to US$2,327 a tonne, which may prompt speculation prices are levelling off.

"If anything, with the grim mood currently hanging over the dairy sector, reflected in the RBNZ’s recently-pared outlook for incomes, such a small dip in prices might almost be perceived as a positive," said Raiko Shareef, currency strategist at Bank of New Zealand.

Data out today locally includes the balance of payments for the first quarter, which may provide more evidence of the impact of weak dairy prices on the nation's trade balance.

The kiwi traded at 62.08 euro cents from 61.94 cents late yesterday as Greek Prime Minister Alexis Tsipras dug in his toes in the standoff with creditors, defying calls to introduce more austerity measures to free up bailout funds as a crucial month-end debt repayment looms. In a sign of the divide between the heavily indebted nations and creditors, Tsipras reportedly said the International Monetary Fund bears "criminal responsibility" for Greece's debt crisis.

The kiwi traded at 90.08 Australian cents from 90.03 cents yesterday and fell to 86.13 yen from 86.34 yen. The kiwi was little changed at 44.63 British pence from 44.75 pence.

BusinessDesk.co.nz

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