Market Talk - Currency: Dairy, China and US payrolls
Jason Walls and ASB's Sam Tuck discuss the global currency market news on NBR Radio and on demand on MyNBR Radio.
Join reporter Jason Walls and ASB's Sam Tuck for this week’s Market Talk as they discuss the global currency market news on NBR Radio and on demand on MyNBR Radio.
Last week’s soft data for dairy didn’t have a huge impact on the New Zealand dollar, as markets had already priced in a fall.
This, according to NBR reporter Jason Walls, who says the downgraded forecast of Fonterra’s farmgate milk price payout was actually higher than the market thought it would be.
He says although the forecasted payout is $3.85 kg/MS, far down from the initial May estimate of $5.25 kg/MS, the dividends of between 40-50c were higher than expected.
ANZ senior FX strategist agrees, adding it is not yet clear where the “bottom” is.
He says the dairy price was just one element of what was an “interesting week for the New Zealand dollar.”
He says the price of commodities fell last week too.
“You would expect this to send the New Zealand dollar lower but, as it turns out, it held up well as – much like the dairy figures – the data was anticipated by the market.”
He says the drop in prices is largely down to the lack of demand from China.
“China’s demand for commodities is driving the global demand at the moment,” he says.
Mr Walls says China is in the process of a “regulated slowdown,” where the government and the central bank are working together to make the country less manufacturing dependent.
Mr Tuck expects the pace of Chinese growth to slow down in the coming years.
To build your own NBR Radio playlist and enjoy instant on-demand access to any audio, sign up for our FREE smartphone-only subscription to NBR ONLINE.
NBR Radio
Mon, 10 Aug 2015
Mon, 10 Aug 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Market Talk - Currency: Dairy, China and US payrolls
50362