NZ dollar little changed after Fonterra hikes forecast payout
By Paul McBeth
Aug. 27 (BusinessDesk) - The New Zealand dollar was little changed from yesterday after Fonterra Cooperative Group hiked its forecast payout to farmers as global dairy prices remain elevated.
The kiwi slipped to 78.12 US cents at 5pm in Wellington from 78.43 cents at 8am, and was little changed from 78.23 cents yesterday. The trade-weighted index traded at 78.80 from 73.83.
Fonterra raised its forecast payout 30 cents to $7.80 per kilogram of milk solids for the 2014 season, up from an estimated $5.80 per kgms in the season just finished. Dairy accounts for about a quarter of New Zealand’s exports and the kiwi dollar is often linked with movements in local commodity prices. Still, investors are more focused on US data and whether the Federal Reserve will start winding back its asset purchase programme next month.
“The sentiment around the kiwi and Aussie is not great at the moment,” said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. “We’re going to go right through until the middle of September when the Fed meets” with the kiwi following US data, he said.
The Australasian currencies have also been coming under pressure as investors spurn emerging markets as developing economies look increasingly fragile, preferring instead so-called ‘safe haven’ assets in developed nations.
The New Zealand rose to 87.02 Australian cents at 5pm in Wellington from 86.51 cents yesterday and declined to 76.75 yen from 77.17 yen. The kiwi was little changed at 58.40 euro cents from 58.47 cents yesterday and edged down to 50.15 British pence from 50.25 pence.