Fonterra dairy auction boosts NZ dollar
The New Zealand dollar soared overnight on the back of a strong dairy auction result, with the focus now turning to a speech this afternoon by Reserve Bank governor Graeme Wheeler.
The kiwi recently traded at US84.80 cents, up almost half a cent from US84.36c at 5pm yesterday, while on the Trade Weighted Index of major trading partners' currencies it was unchanged at 76.90.
Prices at Fonterra's latest GlobalDairyTrade auction rose 3.1 per cent, cementing the fact that demand has not been compromised by bad press around traces of nitrate inhibitors found in some milk products.
The key price for whole milk powder, the biggest export by volume, rose 5.8 per cent and has now increased 16 per cent since the beginning of the year.
In Westpac's morning currency briefing, market strategist Imre Speizer said the release of fourth-quarter Producers' Price Index data today was "stale news" given consumer price index data is already known.
Instead, markets had been alerted to a speech by Wheeler to manufacturers and exporters in Auckland, at 3.30 pm. The speech, which is closed to media, is expected to address the persistently high exchange rate.
On the crosses, the kiwi recently traded at 81.82 Australian cents, up from A81.70c at 5pm yesterday, and 63.33 euro cents, up from 63.20 euro cents. It opened at 54.96 pence, up from 54.54p, and 79.16 yen, up from 79.04 yen.