Kiwi falls against resurgent greenback as dairy prices decline, RBNZ governor to speak
(BusinessDesk) - The New Zealand dollar fell against a resurgent greenback, which has climbed on a trade-weighted basis this week, as dairy prices declined for the first time this year and traders looked ahead to Reserve Bank governor Grant Spencer's appearance at parliament.
The kiwi declined to 73.45 US cents as at 8am in Wellington from 73.56 cents late yesterday. The trade-weighted index was at 75.33 from 75.31.
Dairy product prices slipped at the GlobalDairyTrade auction, sliding for the first time this year after three consecutive increases. The GDT price index eased 0.5 percent while whole milk powder rose 0.3 percent. Meanwhile, Spencer is scheduled to appear before the finance and expenditure committee today in what's likely to be his last appearance before Adrian Orr takes over. The central bank kept policy broadly unchanged at its last review.
"It was a narrow range for the kiwi overnight, but with the USD finding some more love, there is perhaps a bias to test lower levels today," said Philip Borkin, senior economist at ANZ Bank New Zealand, in a note. "Could the catalyst be firmer currency language from the RBNZ governor?"
"We aren't optimistic about (dairy) pricing for the months ahead, as large EU stockpiles of skim milk powder continue to overhang the market and elevated EU milk production remains a headwind that is likely to persist," Borkin said.
The kiwi rose to 59.54 euro cents from 59.38 cents after Germany's Zew survey of current economic conditions fell 92.3 from 95.2 in January. It traded at 93.07 Australian cents from 92.98 cents when it fell after the minutes to the latest Reserve Bank of Australia meeting offered a very similar message that it's not going to move rates anytime soon.
The kiwi traded at 52.51 British pence from 52.62 pence late yesterday. It fell to 4.6602 yuan from 4.6676 yuan and rose to 78.81 yen from 78.52 yen.