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

 


NZ dollar tests 84.50 US cents overnight as dairy slides

NZ dollar tests 84.50 US cents overnight after "significant' fall in dairy prices

By Tina Morrison

Aug. 6 (BusinessDesk) - The New Zealand dollar may break through its key 84.50 US cent support level as investors exit the kiwi on concern a significant drop in global dairy prices will weigh on economic growth, amid increasing demand for the greenback.

The kiwi tested its 200-day moving average of 84.50 US cents overnight but failed to break through. The local currency fell to 84.68 US cents at 8am in Wellington, from 85.21 cents at 5pm yesterday. The trade-weighted index dropped to 79.41 from 79.76 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, jumped to its highest in 10 months, buoyed by better economic data and demand for safe haven assets after Russian President Vladimir Putin ordered a response to US and European sanctions over Ukraine. The New Zealand dollar was the worst performing major currency after dairy product prices slumped 8.4 percent to the lowest level since October 2012 in Fonterra Cooperative Group's GlobalDairyTrade auction early this morning,

"There was some notice paid to the further dairy price fall, quite a significant fall, however most of the kiwi fall last night was to do with global risk aversion and US dollar strength rather than local factors," said Imre Speizer, Westpac Banking Corp senior market strategist. "The downside is the vulnerable one on the day, expect 84.50 to give way."

The next major support level for the kiwi is 84 US cents, Speizer said.

In New Zealand today, traders will be eyeing employment data scheduled for release at 10:45am. The second quarter unemployment rate is expected to fall to 5.8 percent from 6 percent in the first quarter, while employment is picked to expand 0.7 percent as jobs growth is met from rising labour force participation amid subdued wage inflation, according to a Reuters poll of economists.

Still, the data can be volatile, said Westpac's Speizer. "We are braced for the possibility of a rogue number but if it behaves itself, a modestly improved report shouldn't do too much to the kiwi," he said.

The New Zealand dollar fell to 91 Australian cents from 91.25 cents yesterday, dropped to 63.31 euro cents from 63.49 cents and weakened to 50.17 yen from 50.51 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news