Dairy industry lift boosts NZ dollar

The New Zealand dollar spurted higher around 8am after Fonterra announced it was increasing its forecast payout to farmers by around 20 per cent more than it perviously indicated in September.

The kiwi had been around the US72.45c level when foreign exchange markets closed for the weekend at 11am on Saturday.

Following the Fonterra announcement it was up to around US73.40c by 8.20am today.

The NZ dollar also zoomed up from around 65.12 yen shortly before 8am to near 66 yen, from 0.4880 euro to 0.4930, and from A78.85c to A79.55c against the Australian dollar.

Even before the payout news, the NZ dollar had been up on its level at the local close on Friday evening.

BNZ Capital senior strategist Danica Hampton said the NZ dollar spent most of the time overnight Friday in a range between US72c and US73c.

Non-farm payroll data from the United States disappointed expectations, with the US unemployment rate surging to 10.2 per cent.

The worrisome US data sparked a bout of safe-haven demand, with the greenback and yen initially strengthening, with the kiwi plunging sharply below US72c, Ms Hampton said.

But the US dollar strength did not last long.

- NZPA