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

 


NZ dollar falls below 85 US cts after Fonterra cuts payout

NZ dollar falls below 85 US cts after Fonterra cuts payout to farmers

By Tina Morrison

July 30 (BusinessDesk) - The New Zealand dollar dropped below 85 US cents for the first time in seven weeks after Fonterra Cooperative Group cut its forecast payout to dairy farmers and a stronger US currency saw the kiwi lose some of its allure.

The kiwi fell as low as 84.90 US cents overnight and was trading at 84.96 cents at 8am in Wellington, from 85.15 cents at 5pm yesterday. The trade-weighted index fell to 79.40 from 79.52

The New Zealand dollar underperformed other major currencies overnight amid broad US dollar strength, with the greenback holding close to this year's high against a basket of currencies. Optimism is building about a recovery in the world's largest economy ahead of major data and policy announcements this week starting with tonight's Federal Reserve meeting and second-quarter GDP data and private payrolls report. The kiwi has fallen half a cent since yesterday morning in the lead-up to Fonterra's announcement it would cut the 2015 forecast payout to $6 per kilogram of milk solids from a previous forecast of $7/kgMS and from a record $8.40 /kgMS in 2014.

"It was a night of broader based US dollar strength," said Bank of New Zealand currency strategist Raiko Shareef. "The New Zealand dollar was the major underperformer and that can broadly be attributed to the Fonterra news yesterday. That continues the pressure that has been building on kiwi for essentially all of July."

The local currency has declined 3.1 percent so far this month amid weaker-than-expected inflation and commodity prices and following Reserve Bank hints it may intervene to pull down the kiwi after signalling a pause in its hiking cycle.

"We have had a series of quite sharp setbacks for the kiwi, all fundamentally bringing it back in line with where it really should be," said the BNZ's Shareef. "The pressure is still lower."

Traders will now be looking for direction from the US, starting with tonight's key releases and ending the week with a key payrolls report on Friday. The kiwi may head down towards 84 US cents should the US announcements exceed expectations, Shareef said.

Today, New Zealand data is released on June building consents.

The kiwi slipped to 90.52 Australian cents from 90.62 cents yesterday, weakened to 63.36 euro cents from 63.40 cents, was little changed at 50.15 British pence from 50.17 pence and declined to 86.75 yen from 86.84 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Going Dutch: Fonterra Kicks Off $144M Partnership With Dutch Cheese Maker

Fonterra Co-operative Group, the world’s largest dairy exporter, has commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands, its first wholly-owned and operated ingredients plant in Europe. More>>

ALSO:

Scoop Business: NZ Retail Sales Beat Estimates

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend. More>>

ALSO:

Delivery Cuts Go Ahead: 'Government Money Grab' From NZ Post

"It's a money grab by the Government as the shareholder of New Zealand Post" says Postal Workers Union advocate Graeme Clarke about the changes announced by NZ Post. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news