NZ dollar gains after failing to break below support levels; dairy prices fall
By Jonathan Underhill
April 4 (BusinessDesk) - The New Zealand dollar gained after failing to break below its recent support levels and as
global risk sentiment improved.
The kiwi dollar traded at 72.54 US cents as at 8am in Wellington from 72.26 cents late yesterday. It dropped as low as
71.84 cents, around a level it has only broken below a handful of times this year. The trade-weighted index rose to
74.55 from 74.20.
US stocks rebounded after a selloff at the start of the week and the Chicago Board Options Exchange Volatility Index
(VIX), known as Wall Street's fear gauge, fell about 10 percent to 21.21. Commodity-linked currencies strengthened and
the kiwi dollar held onto its gains even as dairy product prices fell for the fourth straight auction overnight,
although whole milk powder gained 1.6 percent.
"NZD rebounded with better risk sentiment overnight," Con Williams, rural economist at ANZ Bank New Zealand, said in a
note. "The NZD continues to appear relatively resilient to attempts to move lower for now, dips under 0.72 are being
well supported."
Dairy product prices fell at the Global Dairy Trade auction, led by anhydrous milk fat. The GDT price index slipped 0.6
percent from the previous auction two weeks ago. Some 17,222 tonnes of product was sold, down from 18,635 tonnes two
weeks ago. Whole milk powder rose 1.6 percent to US$3,278 a tonne.
In New Zealand today, traders will be watching for the ANZ Consumer Confidence survey for March while Australia has
February building approvals and retail sales.
The kiwi dollar rose to 59.11 euro cents from 58.70 cents late yesterday after the European Markit PMI came in at 56.6
in March, in line with initial estimates and down from 58.6 in February.
The kiwi gained to 94.43 Australian cents from 93.94 cents yesterday, when the Reserve Bank of Australia kept its key
rate at 1.5 percent.
The New Zealand dollar jumped to 77.33 yen as risk sentiment improved from 76.55 yen yesterday. It rose to 4.5614 yuan
from 4.5428 yuan and gained to 51.60 British pence from 51.39 pence.
(BusinessDesk)
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