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NZ dollar falls after stronger US data, unexpected decline in dairy product prices

Wednesday 16th August 2017

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The New Zealand dollar fell after stronger-than-expected US retail sales lifted the greenback and prices fell in the GlobalDairyTrade auction overnight.

The kiwi dropped to 72.36 US cents as at 8am in Wellington from 73.01 cents late yesterday. The trade-weighted index fell to 76.53 from 77 yesterday.

The US dollar index gained about 0.4 percent after retail sales in July rose 0.6 percent, twice the forecast pace, while sales in the previous month were revised higher.  The data added to positive sentiment for the greenback, which has been helped by reducing concerns about a possible conflict with North Korea. Meanwhile, the GDT price index fell 0.4 percent overnight, the fourth decline in five auctions. Whole milk powder slid 0.6 percent to US$3,143 a tonne. 

"This morning’s US retail sales result for the month of July exceeded expectations sparking a USD rally," traders at HiFX said in a note. "A combination of broad USD strength and a fall in dairy prices has seen the NZD underperform overnight."

Traders are putting odds of a third rate hike by the Federal Reserve this year at 42 percent.

The kiwi fell to 79.97 yen from 80.47 yen yesterday. North Korea's official news agency KCNA reported yesterday that leader Kim Jong Un plans to watch the actions of the US for a while longer before making a decision, having threatened to undertake a missile strike on the US territory of Guam.

The kiwi declined to 92.50 Australian cents from 92.86 cents. It dropped to 4.8349 yuan from 4.8717 yuan, fell to 61.60 euro cents from 61.99 cents and traded at 56.23 British pence from 56.30 pence.

(BusinessDesk)

 



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