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

 


NZ dollar slips below 83 US cents on fall in dairy prices

NZ dollar slips below 83 US cents on fall in dairy prices, upbeat US data

By Tina Morrison

Sep. 3 (BusinessDesk) - The New Zealand dollar dipped below 83 US cents for the first time since February as manufacturing data pointing to a recovery in the US strengthened the greenback while a decline in dairy prices at Fonterra Cooperative Group's latest auction weighed on the kiwi.

The local currency touched a low of 82.89 US cents, and was trading at 83.14 cents at 8am in Wellington, from 83.46 cents at 5pm yesterday. The trade-weighted index was at 78.79 from 79.02 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, rose to its highest since July last year on optimism about a recovery in the world's largest economy after the Institute for Supply Management's US manufacturing activity index rose more than expected in August to its strongest level since March 2011. Meanwhile demand for kiwi waned after dairy product prices dropped to the lowest level since July 2012 in Fonterra's latest GlobalDairyTrade auction. Dairy products are New Zealand's largest commodity export.

"The US dollar was strong because of strong data, and milk prices fell," said Westpac Banking Corp New Zealand senior market strategist Imre Speizer. The kiwi is "under downward pressure still," he said.

The local currency has declined from a high of 88.35 US cents in July, weighed down by falling commodity prices, slower economic growth forecasts and a pause in the Reserve Bank's hiking cycle.

The next major support level is 82.45 US cents, Westpac's Speizer said.

Today, New Zealand data is released on second quarter building work at 10:45am.

However traders will likely be focused on Australia, where data is published on second quarter gross domestic product and Australian Reserve Bank governor Glenn Stevens is scheduled to speak to the Committee for Economic Development of Australia at a luncheon in Adelaide, which is open to the media.

The Reserve Bank of Australia yesterday kept the cash rate unchanged at 2.5 percent and said a "period of stability" in interest rates was warranted given the outlook for inflation. Stevens said the Australian dollar "remains above most estimates of its fundamental value," especially given the decline in commodity prices.

The kiwi declined to 89.60 Australian cents from 89.79 cents yesterday, slipped to 63.32 euro cents from 63.61 cents and was little changed at 87.41 yen from 87.44 yen.

The local currency advanced to 50.47 British pence from 50.33 pence yesterday after a poll showed support for Scottish independence had increased ahead of a referendum in two weeks that could see Scotland split from the rest of the UK.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news