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


NZ dollar falls after Fonterra cuts forecast payout

NZ dollar falls after Fonterra cuts forecast payout, Japan's Abe limits slide

By Paul McBeth

Sept. 24 (BusinessDesk) - The New Zealand dollar fell to a year-low after Fonterra Cooperative Group cut its forecast payout to farmers for the current season in the face of dwindling dairy prices. The decline was limited by reports Japanese Prime Minister Shinzo Abe is wary of weakness in the yen.

The kiwi dollar fell as low as 80.40 US cents after the Fonterra announcement, trading at 80.81 cents at 5pm in Wellington, down from 81.25 cents yesterday. The trade-weighted index fell to 78.16 from 78.53 yesterday.

Fonterra cut its forecast payout to farmers to $5.30 per kilogram of milk solids for the 2015 season from an earlier forecast of $6/kgMS as the pinch on global dairy prices continued. That added to a downbeat view on the kiwi after commodity-linked currencies were sold off during the Northern Hemisphere session amid heightened concerns over the strength of China's economy. Still, the decline was halted in Asian trading after Japan's Abe was reported as saying he wanted to be careful about the impact of a weaker yen, sapping investor demand for the greenback.

"The market had pretty well priced in all of the Fonterra forecast," said Martin Rudings, senior dealer foreign exchange at OMF in Wellington. "The kiwi would have gone down a little bit further, but we had Japan's Abe say for a second day in a row he was concerned about a weakening yen - that's what stopped the market from buying the (US) dollar today."

The local currency fell to 87.69 yen at 5pm in Wellington from 88.35 yen yesterday.

New Zealand government figures today showed a smaller than expected monthly trade deficit of $472 million in August, as falling imports and rising exports of livestock and dairy narrowed the shortfall. New Zealand has been benefiting from strong terms of trade, and falling global prices for dairy products and logs are expected to weigh on that outlook.

The kiwi dollar was little changed at 91.10 Australian cents from 91.16 cents yesterday, and fell to 62.85 euro cents from 63.21 cents. It declined to 49.25 British pence from 49.59 pence yesterday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


BusinessDesk: Body massages and Uber are in, DVDs are out, says Stats NZ

Statistics New Zealand has rejigged the consumers price index basket in its latest three-year review, adding body massages, Airbnb and Uber and removing DVD and Blu-Ray players…More>>


StuffMe: Commerce Commission Welcomes Dismissal Of Merger Appeal

In a summary of their judgment released today, Justice Dobson and lay member Professor Martin Richardson dismissed the appellants’ process criticisms and found the Commission was entitled to place significant weight on the prospect of reduced quality of the products produced by the merged entity. More>>


Digital Futures: New Chief Technology Officer Role Created

Communications Minister Clare Curran has called for expressions of interest for the new role of Chief Technology Officer position to help drive a forward-looking digital agenda for New Zealand. More>>

Dry: Beef + Lamb Launches Drought Resources

The resources include a fact sheet outlining strategies to manage and mitigate the effects of drought, coping with stress on the farm and advice on feed requirements and animal welfare during the dry period. More>>


InternetNZ: Net Neutrality Failure In US "Will Hurt All Users"

InternetNZ Chief Executive Jordan Carter has condemned the decision by the United States communications regulator to undo 2015 open Internet rules, warning that all Internet users will end up worse off as a result. More>>