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

 

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

March 2017: Commerce Commission Delays Decision On Fairfax-NZME

The Commerce Commission has delayed its decision on the proposed merger between NZME and Fairfax Media's New Zealand assets, saying the deal is complex and it needs more time to assess the impact on both news content and the advertising market. More>>

ALSO:

Plan Plan: Permanent Independent Hearings Panel Proposed For Planning

The Productivity Commission recommends creating a permanent independent hearings panel like the one that cut through local politics to settle Auckland’s Unitary Plan, for the whole country. More>>

ALSO:

Statistics: NZ Jobless Rate Falls To 5.1% Under New Methodology

New Zealand's unemployment rate fell more than expected in the second quarter as Statistics New Zealand adopted a new way of measuring the labour market to bring the country in line with international practices, and while a growing economy continued to support jobs growth. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news