Milk pushes kiwi sideways

The New Zealand dollar traded sideways against the greenback, as concerns about the safety of the country’s biggest export weighed heavily on a wave of buoyant global risk sentiment.

The kiwi recently traded at US83.60c, unchanged from Friday evening, while on the Trade Weighted Index of major trading partners’ currencies it was also unchanged at 75.40.

The revelation that traces of nitrate inhibitor DCD had appeared in milk tested by Fonterra in September made international headlines at the end of last week.

Yesterday the co-op giant’s chief executive Theo Spierings reassured consumers that Fonterra products were safe to consume, and said the reaction was way out of proportion.

New Zealand's dairy export industry is worth $11.5 billion, accounting for nearly a third of all exports.

Meanwhile, global equity markets closed on a high note last week, with signs that the European financial system is growing stronger.

The European Central bank said banks would repay 137 billion euros worth of crisis loans next week, beating the average estimate of around 100 billion euros.

On Wall Street the Dow Jones Index rose 1.8 per cent over the week, the S&P 500 rose 1.1 per cent and the Nasdaq rose 0.5 per cent, marking the fourth week of gains for all three indices.

On the crosses, the kiwi recently traded at 80.26 Australian cents, up from A80.0 at 5pm of Friday, and 76.11 yen, up from 75.60 yen earlier. The kiwi opened at 62.16 euro cents, down from 62.55 euro cents earlier and 53.02 pence, up from 52.96p last week.

Many local traders were out of action today for the Auckland anniversary public holiday.