NZ dollar steady after dairy price jump

  • 19/08/2015
NZ dollar steady after dairy price jump

The New Zealand dollar has barely changed after dairy prices jumped from a six-year low at the latest GlobalDairyTrade auction.

The kiwi traded at 65.82 US cents at 5pm in Wellington from 65.84 cents at 8am and 65.89 cents yesterday.

The trade-weighted index was little changed at 70.94 from 71.04 yesterday.

The GDT average winning price jumped 14.8 percent to US$1974 at the overnight auction, ending a string of declines that forced Fonterra to cut its forecast payout to farmers, and prompted economists to pare back their expectations for economic growth.

The rebound had been expected by investors with NZX futures contracts indicating a gain, and markets are eyeing up US information to get a steer on the likelihood for an interest rate hike by the Federal Reserve when it next meets in September.

The kiwi had been rising heading into the dairy auction, and "you got the result so there was some follow through afterwards, but after that it stalled - there's nothing happening around the world until we get the US CPI and Fed minutes much later tonight," said Imre Speizer, senior market strategist at Westpac Banking Corp in Auckland.

"Sixty-five [US cents] is proving to be very sticky - it's had a few goes at it and hasn't got through, and doesn't look like getting through."

The kiwi slipped to 4.2109 Chinese yuan from 4.2255 yuan yesterday and to 81.78 yen from 82.03 yen, but gained to 89.87 Australian cents from 89.48 cents and was little changed at 59.55 euro cents from 59.59 cents.