The New Zealand dollar was little changed, paring its overnight gains after prices rose less than expected in the latest GlobalDairyTrade auction.
The kiwi rose to 73.18 US cents as at 8am in Wellington, having reached as high as 73.58 cents ahead of the auction, from 73.23 cents late yesterday. The trade-weighted index followed a similar pattern and was recently at 78.05 from 78.09 yesterday.
The GDT price index rose 1.7 percent to US$2,975, much less than the 5-to-10 per cent gain anticipated by futures traders, while whole milk powder actually fell 0.2 per cent to US$2,782 a tonne, snapping four successive gains.
The latest auction wasn't enough to deter Fonterra Cooperative Group from announcing a 50 cent increase in its forecast 2016/17 farmgate milk price to $5.25 per kilogram of milk solids, taking the total projected payout to $5.75-to-$5.85 before retentions. It said global milk supply was reducing while demand remained steady, although a high kiwi dollar was offsetting some of the benefits of GDT auction price gains.
"The NZD/USD pushed higher last evening, poking its nose toward 0.7360. However, the GDT auction in the early hours of this morning curtailed the move," said Kymberly Martin, senior market strategist at Bank of New Zealand.
