The New Zealand dollar gained as dairy futures indicated global dairy prices may have found a base.
This will ease pressure on the Reserve Bank to cut interest rates in response to a slump in the country’s biggest export says BusinessDesk.
The kiwi rose to 65.78 US cents at 5 pm in Wellington from 65.34 cents at 8 am and 65.24 cents yesterday. The trade-weighted index advanced to 71.30 from 71.02 yesterday reports BusinessDesk.
Dairy futures pricing has been pointing a rise in milk product prices after recent declines at the GlobalDairyTrade auction.
According to BusinessDesk, Fonterra Cooperative Group chairman John Wilson today told shareholders the world’s biggest dairy exporter anticipates prices to rise early next year, which it needs to meet its earnings and payout forecasts.
“I don’t want to jump the gun, but it looks like we may see dairy prices continue to stabilise,” said Stuart Ive, senior dealer foreign exchange at OMF in Wellington. “I expect the kiwi to continue with this little pattern just ticking higher and not running away.”
The week is disrupted by the US Thanksgiving Day holiday on Thursday, where US markets close, and some take the Friday off as well.
Some traders have reduced their US dollar holdings after it touched an eight-month high earlier this month ahead of the shortened trading week in the US.
The local currency fell to 90.41 Australian cents from 90.62 cents yesterday after Reserve Bank of Australia governor Glenn Stevens talked down the prospect of another rate cut.
The kiwi climbed to 4.2019 Chinese yuan from 4.1681 yuan yesterday and rose to 80.46 yen from 80.08 yen. It increased to 61.62 euro cents from 61.34 cents and gained to 43.54 British pence from 43.10 pence.
