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

 

Post-Post: Brian Roche To Step Down As NZ Post CEO

Brian Roche will step down as chief executive of New Zealand Post in April 2017, having led the state-owned postal service's drive to adjust to shrinking mail volumes with a combination of cost cuts, asset sales, modernisation and expansion of new businesses. More>>

ALSO:

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

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>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news