The New Zealand dollar gained against a broadly stronger greenback after prices rose more than expected in the latest GlobalDairyTrade auction, stoking speculation Fonterra Cooperative Group may lift its forecast milk payout from a decade-low.
The kiwi rose to 63.51 US cents from 63.10 cents late yesterday, rebounding from an earlier dip that had been driven by a stronger US dollar after US retail sales rose. The trade-weighted index rose to 68.80 from 68.28.
The GDT average winning prices jumped 16.5 percent to US$2,568 in the latest GDT sale, the biggest increase in five years. Whole milk powder soared 20.6 percent to US$2,495 a tonne. Some analysts say gains in prices at the past three auctions may encourage Fonterra to revisit its forecast payout for the current season of $3.85 per kilogram of milk solids, a rate that's below the cost of production for many farms and is expected to slow growth in the broader economy.
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