NZ dollar falls as dairy prices drop

Photo / Dean Purcell

The New Zealand dollar fell against the greenback after prices tumbled for the nation's biggest export at Fonterra's latest online auction of dairy products.

The currency was knocked down from yesterday's fresh post float high of 83.30 US cents after the GDT-TWI Price Index fell 6.7 per cent to US$4,017 a metric tonne, according to results posted on the globalDairyTrade auction website. Dairy products account for more than 26 per cent of the country's merchandise exports by value.

"The overnight Fonterra auction was enough to knock the New Zealand dollar lower in very early morning trading," said Alex Sinton, a senior dealer at ANZ New Zealand. "It opens this morning in familiar territory but looking like fresh highs could be out of the question today."

The kiwi recently traded at 82.63 US cents, down from 82.83 cents yesterday, and slipped to 71.26 on the trade-weighted index of major trading partners' currencies from 71.40.

It fell to 77.18 Australian cents from 77.49 cents yesterday, and dropped to 66.97 yen from 67.22 yen. It rose to 57.25 euro cents from 57.20 cents yesterday, and fell to 51.43 pence from 51.75 pence previously.

Demand for growth-linked currencies such as the kiwi and Australian dollar was also dented by weak offshore leads. On Wall Street, the Standard & Poor's 500 Index fell 0.1 per cent to 1,337.89 on its first day of trading after the Independence Day holiday. Europe's Stoxx 600 Index was mixed, closing 0.03 per cent higher at 275.62.

The kiwi may trade in a range of 82.40 US cents and 83.20 cents, Sinton said.