Sharechat Logo

NZ dollar gains after milk prices jump more than expected

Wednesday 17th August 2016

Text too small?

The New Zealand dollar climbed after dairy prices rose more than expected at the latest GlobalDairyTrade auction, clawing back losses after a Federal Reserve official raised the prospect of an early US rate hike.

The kiwi rose to 72.70 US cents at 8am from 72.26 cents yesterday. The trade-weighted index advanced to 76.72 from 76.07 yesterday. 

The local currency dropped from as high as 73.04 US cents after New York Federal Reserve president William Dudley said the world's biggest central bank could raise the federal funds rate next month and that the market was complacent about the need to lift short-term rates, while noting that there might not be as many increases over the longer term. A stronger-than-expected result at Fonterra Cooperative Group's GlobalDairyTrade auction helped the kiwi recover some of that decline with prices for whole milk powder jumping 19 percent to US$2,695 a tonne, and a 13 percent gain in the trade-weighted basket. 

"A bumper result was expected, but expectations were still exceeded," Bank of New Zealand currency strategist Jason Wong said in a note. "The NZD now sits at 0.7280.  Another unsuccessful attempt to push much beyond 0.73 will have got the attention of technical analysts and that level represents an area of strong resistance."

Local employment data is expected to show the unemployment rate fell to 5.3 percent in the June quarter, with Statistics New Zealand delaying the release to ensure quality control as they use a new methodology, and BNZ's Wong said the data could shock the market if it delivers a surprise result. Producer inflation figures will also be watched. 

The local currency rose to 94.43 Australian cents from 94.05 cents yesterday and increased to 72.91 yen from 72.59 yen. It was little changed at 64.49 euro cents from 64.54 cents and slipped to 55.75 British pence from 56 pence. The kiwi rose to 4.8156 Chinese yuan from 4.6954 yuan yesterday.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
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:

Kiwi Property FY24 annual results announcement date
MFB - FY24 Results Announcement Date and Briefing Details
AIA - Announces books closed for retail bond offer
May 8th Morning Report
NZ-UAE free trade on the table
ANZ - 2024 Half Year Results Documents
FWL - Foley Wines Limited 2024 Harvest
IKE Closes Major Multi-Year Subscription Deals
AIA - 2024 Macquarie Australia Conference Overview of AIA
Devon Funds Morning Note - 06 May 2024