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

 


NZ dollar buoyed by Fonterra plans to expand capacity

NZ dollar buoyed by Fonterra plans to expand capacity, form Chinese partnership

By Tina Morrison

Aug. 28 (BusinessDesk) - The New Zealand dollar rose after Fonterra Cooperative Group yesterday said it would maintain its milk price forecast, expand its local processing capacity and form a partnership to help sell its products in China, New Zealand's largest trading partner.

The kiwi gained to 83.75 US cents at 8am in Wellington, from 83.67 cents at 5pm yesterday. The trade-weighted index was at 78.98 from 79 yesterday.

The local currency has jumped half a US cent in the past 24 hours following the announcement from Fonterra, the world's largest dairy exporter. Dairy is New Zealand's largest commodity export and traders had been concerned the company could have lowered its $6 per kilogram of milk solids forecast for 2015 as increased supply weighs on prices.

"The kiwi was the star of the night as the announcement by dairy giant Fonterra that it's entering a joint venture to meet demand for infant formula in China was met with approval by the market," Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management in New York, said in a note. The investment "suggests that Fonterra may be able to smooth out its delivery problems and also indicates that its stream of income from China - which is a significant contributor to the New Zealand economy - is likely to remain in place."

The kiwi may target 84 US cents, Schlossberg said.

The local currency's gain was assisted by a broadly weaker US dollar overnight, with the US dollar index declining from its highest level in more than a year.

The New Zealand dollar edged lower to 89.69 Australian cents from 89.77 cents yesterday ahead of Australian data on capital expenditure today. While data for the second quarter may be weaker reflecting a decline in mining investment, the currency affect could be muted as capex forecasts for the coming year may be revised higher, Kymberly Martin, senior market strategist at Bank of New Zealand, said in a note.

The kiwi slipped to 63.47 euro cents from 63.57 cents yesterday. The European Central Bank meets next week amid elevated expectations of additional stimulus following ECB President Mario Draghi’s comments about the region’s declining inflation in Jackson Hole last week. However, the ECB is unlikely to take new policy action next week unless August inflation figures due tomorrow show the euro zone sinking significantly towards deflation, Reuters reported, citing unnamed ECB sources.

"The barrier to QE is still very high," said one of the sources, all of whom requested anonymity, adding that discussion at the meeting was expected to centre on reinforcing existing policy measures of credit easing and liquidity provision, according to Reuters.

The local currency was little changed at 50.53 British pence from 50.55 pence yesterday, and at 87.01 yen from 87.02 yen.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news