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Dairy price surge lifts NZ dollar

The New Zealand dollar rose strongly through the early hours of the morning, buoyed by surging dairy prices at Fonterra's monthly online auction.The kiwi fell to around US69.60c about 1am, its lowest level against the greenback in nearly four weeks. The N

NZPA
Wed, 07 Apr 2010

The New Zealand dollar rose strongly through the early hours of the morning, buoyed by surging dairy prices at Fonterra's monthly online auction.

The kiwi fell to around US69.60c about 1am, its lowest level against the greenback in nearly four weeks. The NZ dollar then rose to be buying US70.65c at 8am, up from its 5pm level of US70.23c.

In its morning briefing, ANZ said a 21 percent rise in wholemilk powder prices at the overnight auction was welcome news for the NZ dollar, which promptly got a lift off overnight lows.

The auction price rise came hot on the heels of yesterday's ANZ commodity price index which showed a new record high for this country's major export commodities.

But more issues concerning Greece's debt problems did see the euro dragged lower, pushing the Australian and NZ dollars down with it, ANZ said.

The kiwi fell to its lowest level against the Australian dollar in more than nine years, dropping to A75.5c, before recovering to be at A76.11c by 8am, just slightly down from A76.20c at 5pm.

The aussie gained extra strength against the NZ dollar after the Reserve Bank of Australia yesterday raised interest rates by 25 points, as expected by many economists, taking rate across the Tasman to 4.25 percent.

At the local open, the NZ dollar was also buying 0.5272 euro, up from 0.5234 at 5pm, and was up to 66.22 yen at the local open from 66 yen at 5pm, having reached an 11-week high above 66.90 yen against the Japanese currency on Monday morning.

The trade weighted index rose to 65.68 at 8am from 65.39 at 5pm.

The surging Canadian dollar, meanwhile, hit parity with its US counterpart for the first time since mid-2008 as rising commodity prices boosted the outlook for higher Canadian interest rates.

US interest rates, on the other hand, could stay low for even longer than investors have been anticipating, minutes from the Federal Reserve's last meeting showed.

NZPA
Wed, 07 Apr 2010
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Dairy price surge lifts NZ dollar
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