NZ dollar gains after milk prices jump
The kiwi rose to 72.70USc at 8am.
The New Zealand dollar climbed after dairy prices rose more than expected at the latest GlobalDairyTrade auction, clawing back losses after a Federal Reserve official raised the prospect of an early US rate hike.
The kiwi rose to 72.70USc at 8am from 72.26USc yesterday. The trade-weighted index advanced to 76.72 from 76.07 yesterday.
The local currency dropped from as high as 73.04USc after New York Federal Reserve president William Dudley said the world's biggest central bank could raise the federal funds rate next month and that the market was complacent about the need to lift short-term rates while noting that there might not be as many increases over the longer term. A stronger-than-expected result at Fonterra Cooperative Group's GlobalDairyTrade auction helped the kiwi recover some of that decline with prices for whole milk powder jumping 19% to $US2695 a tonne, and a 13% gain in the trade-weighted basket.
"A bumper result was expected but expectations were still exceeded," Bank of New Zealand currency strategist Jason Wong said in a note. "The NZ dollar now sits at 0.7280. Another unsuccessful attempt to push much beyond 0.73 will have got the attention of technical analysts and that level represents an area of strong resistance."
Local employment data is expected to show the unemployment rate fell to 5.3% in the June quarter, with Statistics NZ delaying the release to ensure quality control as they use a new methodology, and Mr Wong said the data could shock the market if it delivers a surprise result. Producer inflation figures will also be watched.
The local currency rose to 94.43Ac from 94.05Ac cents yesterday and increased to ¥72.91 from ¥72.59. It was little changed at 64.49 euro cents from 64.54 cents and slipped to 55.75 British pence from 56 pence. The kiwi rose to 4.8156 Chinese yuan from 4.6954 yuan yesterday.
(BusinessDesk)
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Paul McBeth
Wed, 17 Aug 2016
Wed, 17 Aug 2016
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NZ dollar gains after milk prices jump
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