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

 

Oil: 2014 New Zealand Petroleum Summit

Simon Bridges: Our abundance of energy and minerals resources provides us with unique opportunities to build the New Zealand economy.

Over the past three years the Government has made significant changes to how the sector is regulated. More>>

ALSO:

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

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