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

 

Lower Levy For Safer Cars: ACC Backtracks On Safety Assessments

Dog and Lemon: “The ACC has based the entire levy system on a set of badly flawed data from Monash University. This Monash data is riddled with errors and false assumptions; that’s the real reason for the multiple mistakes in setting ACC levies.” More>>

ALSO:

Fast Track: TPP Negotiations Set To Accelerate, Groser Says

Negotiations for the Trans-Pacific Partnership will accelerate in July, with New Zealand officials working to stitch up a deal by the month's end, according to Trade Minister Tim Groser. More>>

ALSO:

Floods: Initial Assessment Of Economic Impact

Authorities around the region have compiled an initial impact assessment for the Ministry of Civil Defence, putting the estimated cost of flood recovery at around $120 million... this early estimate includes social, built, and economic costs to business, but doesn’t include costs to the rural sector. More>>

ALSO:

Food: Govt Obesity Plan - No Tax Or Legislation

Speaking to Q+A’s Corin Dann this morning, health minister Jonathan Coleman said tackling obesity was at the top of the Government’s priority list, but there was “no evidence” a sugar tax worked, and further regulation was unnecessary. More>>

ALSO:

Treasury Docs On LVR Policy: Government Inaction Leads To Blurring Of Roles

The Treasury wouldn’t have had to warn the Reserve Bank to stick to its core functions if the Government had taken prompt and substantial measures to rein in skyrocketing Auckland house prices, Labour’s Finance spokesperson Grant Robertson says. More>>

ALSO:

Final EPA Decision: Tough Bar Set For Ruataniwha Dam

Today’s final decision by the Tukituki Catchment Board of Inquiry is good news for the river and the environment, says Labour’s Water spokesperson Meka Whaitiri. “Setting a strict level of dissolved nitrogen in the catchment’s waters will ensure that the dam has far less of an impact on the Tukituki river." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news