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


Stats: Auckland’s Population Falls For The First Time
In the wake of the COVID-19 pandemic, New Zealand’s population growth slowed down with Auckland recording a population decline for the first time ever, Stats NZ said today. “New Zealand saw slowing population growth in all regions... More>>

BusinessNZ: Third Snapshot Report Reveals $9.5 Billion Business Investment In Climate Action

Signatories to the Climate Leaders Coalition have committed to invest $9.5 billion over the next five years to reduce emissions from their businesses, as revealed in their third anniversary snapshot report released today... More>>

Digitl: The home printer market is broken
Printers are more of a security blanket that a serious aid to productivity. Yet for many people they are not optional.
Even if you don’t feel the urge to squirt ink onto dead trees in order to express yourself, others will insist on printed documents... More>>

Retail NZ: Some Good News In COVID Announcements, But Firm Dates Needed

Retail NZ is welcoming news that the Government is increasing financial support for businesses in light of the ongoing COVID-19 lockdown, and that retail will be able to open at all stages of the new “Covid Protection Framework... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>

Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>