Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ dollar recovers after Fonterra cuts payout to farmers

NZ dollar regains ground after Fonterra cuts payout to dairy farmers less than expected

By Tina Morrison

May 28 (BusinessDesk) - The New Zealand dollar gained back ground lost overnight after Fonterra Cooperative Group, the world's largest dairy exporter, reduced its payout to dairy farmers by less than some had expected.

The kiwi was trading at 85.62 US cents at 9am in Wellington, from 85.38 cents immediately before Fonterra's 8:37am announcement and 85.59 cents at 5pm yesterday. The trade-weighted index weakened to 79.72 from 79.87 yesterday.

Fonterra today pulled back its forecast for the coming season to $7 per kilogram of milk solids, better than the $6 payout expected by some. The company also cut its payout for the season winding down this month to $8.40 from a previous forecast of a record $8.65 as increased milk production dents prices. Soaring dairy prices underpinned New Zealand's strong terms of trade last year, and the local currency had fallen ahead of the Fonterra's announcement on concern a sharp decline in the payout could dent economic growth.

"Scaremongering earlier in the week may have depressed expectations into the $6 area and you get this knee jerk response accordingly," said Imre Speizer, senior market strategist at Westpac Banking Corp in Auckland. "It's about what most economists would have forecast. It is not a surprise. We are coming off a record high milk price but it is still a high number and it is still supportive for the economy and moreover Fonterra said they expect supply to rise even further so production is going to increase and production at a decent number is still positive for farm incomes."

Later today, traders will be focused on the ANZ business confidence survey for May, scheduled for release at 1pm. The Reserve Bank will be probably be eyeing the pricing intentions components of the survey for signs of inflation.

The New Zealand dollar was little changed at 92.41 Australian cents at 9am from 92.39 cents at 5pm yesterday ahead of a report on Australian first quarter construction activity today.

The kiwi was little changed at 87.26 yen from 87.28 yen yesterday, at 62.76 euro cents from 62.68 cents and advanced to 50.91 British pence from 50.77 pence yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Crown Accounts: Government Ekes Out Six-Month Surplus Of $9M

The New Zealand government eked out a tiny surplus in the first six months of the fiscal year as growth in domestic consumption lifted the goods and services tax take, while uncertainties over the Kaikoura earthquake costs meant expenses were less than expected. More>>

ALSO:

Almost 400 Jobs: Shock At Cadbury's Dunedin Factory Closure

Workers at Cadbury in Dunedin are reeling after learning this morning that the iconic Cadbury factory is to close, with the loss of almost 400 jobs... “The company had reported it was doing well and this has come out of the blue,” says Chas. More>>

ALSO:

Transport: Boards Of Inquiry For Auckland Roading Projects

Boards of Inquiry have been appointed to decide on two significant Auckland roading projects in a move which will get a decision by the end of the year, Environment Minister Dr Nick Smith and Conservation Minister Maggie Barry announced today. More>>

ALSO:

Three Months On: Quake Reciovery In Kaikōura And Elsewhere

Three months after the magnitude 7.8 earthquake on 14 November, encouraging recovery progress is being made in affected communities. More>>

ALSO:

Jetstar, Qantas For Govt Transport: Government Still In Talks With Air NZ

The government is still negotiating with national carrier Air New Zealand in a cross-agency air travel contract that will add a number of new airlines to the list of approved flyers. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news