NZ dollar trades near month-low as dairy prices fall, housing market cools
By Jonathan Underhill
Oct. 4 (BusinessDesk) - The New Zealand dollar fell, trading near a month-low, as an unexpected drop in dairy prices and further evidence of a cooling property market weighed on sentiment.
The kiwi traded at 71.57 US cents as at 8am in Wellington, and earlier touched 71.46 cents, from 71.62 cents late yesterday. The trade-weighted index fell to 75.60 from 75.82.
Dairy product prices fell in the GlobalDairyTrade auction overnight, with the GDT price index down 2.4 percent and whole milk powder falling 2.7 percent to US$3,037 a tonne. NZX-traded dairy futures had been pointing to stronger prices for New Zealand's biggest export commodity. Some 37,990 tonnes of product was sold, up from 34,117 tonnes at the previous auction. Meanwhile, Quotable Value figures showed annual growth in New Zealand property values continued to slow in September, with the QV house price index up 4.3 percent in the year, the slowest annual rate since mid-2012.
"The shine is dulling slightly on NZ’s economic story, as others improve, and NZD/USD is sitting right on technical support levels right here," said Con Williams, rural economist at ANZ Bank New Zealand, in a note. "Weaker milk and house prices reinforce that NZ’s previously pristine growth position is not as pretty."
Investors are focused on the latest US jobs data due in the coming days, with the ADP employment report on Wednesday, weekly jobless claims on Thursday and the government's nonfarm payrolls report on Friday.
The kiwi fell to 91.33 Australian cents from 91.81 cents late yesterday. The kiwi was at 54.01 British pence from 54.04 pence, declined to 60.90 euro cents from 61.17 cents and dropped to 80.80 yen from 81.01 yen. It traded at 4.7618 yuan from 4.7651 yuan.