Sharechat Logo

NZ dollar pares slide as Fonterra hikes forecast

Tuesday 24th September 2013

Text too small?

The New Zealand dollar pared an earlier decline after Fonterra Cooperative Group, the nation's biggest exporter, hiked its forecast payout to farmers for the second time in as many month

The kiwi traded at 83.33 US cents at 5pm in Wellington climbing from as low as 83.11 cents earlier in the day. The currency had fallen from as much as 8am and 83.63 cents yesterday. The trade-weighted index declined to 77.61 from 77.86.

The local currency got a fillip in late trading when Fonterra said it expected to hikes its forecast payout to farmers by 50 cents per kilogram of milk solids to $8.50/kgMS, on the strength of international demand for dairy products.

"We had expected global milk prices to fall over the course of the season as New Zealand supply recovered from drought and as emerging market economies slowed. Instead, global milk prices have remained extremely high," Westpac Banking Corp chief economist Dominick Stevens said in a note. "High prices have prevailed right through the period of peak volumes at the fortnightly GlobalDairyTrade auctions, and hence revenues must have been much higher than anticipated at the start of the season."

The Fonterra news slowed a decline as investors exited the kiwi in favour of the Australian dollar after yesterday's better-than-expected Chinese manufacturing figures. Australia has greater exposure to the world's second-biggest economy due to its resources sector. The kiwi fell to 88.47 Australian cents from 88.72 cents yesterday.

"We had good manufacturing figures out of China yesterday, and that's lifted the Aussie more than the kiwi," said Michael Johnston, senior trader at HiFX in Auckland. "The weaker kiwi/Aussie has spilled over into the kiwi/US" as international investors sold the local currency, he said.

Investors are mulling the decision by the US Federal Reserve not to start tapering its money printing programme last week as expected, and were thrown a curve-ball in Northern Hemisphere trading by two Fed officials giving conflicting views on the surprise.

The kiwi dollar fell to 82.34 yen at 5pm in Wellington from 82.88 yen yesterday, and was little changed at 61.79 euro cents from 61.81 cents. It fell to 52.01 British pence from 52.21 pence yesterday.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Further Contract Win Strengthens Scott Technology’s Position In Mining Sector
China’s Assertiveness Is Becoming a Problem for Its Friends, Too
New Talisman - Chairman’s Address to AGM 2020 August 6, 2020
T&G reports its 2020 Interim Results
Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria
Talisman Quarterly Activities Report to 30 June 2020
General Capital gives notice of Annual Meeting

IRG See IRG research reports