New Zealand Dollar Weaker Late as Softer Aussie Weighs; FOMC in Focus

 
   By Rebecca Howard 
 

        WELLINGTON, New Zealand--The New Zealand dollar is trading lower against the U.S. dollar late Wednesday, weighed by poor Australian data and weaker dairy prices in the overnight GlobalDairyTrade auction.
        In late Wellington trading, the New Zealand dollar was at US$0.8559 compared with US$0.8620 late Tuesday in New Zealand. It was unchanged against the Australian dollar at A$0.9270.
        "Basically it's just a continuation of what we saw yesterday. There is weaker Australian data coupled with the fall in the milk price overnight," said Murray Hindley, foreign exchange manager at ANZ Bank. "Australasians have lost their shine," he added.
        The Kiwi came under pressure at the open after news that international dairy prices fell in the overnight GlobalDairyTrade Internet-based auction, an international trading platform established by New Zealand's Fonterra Co-Operative Group Ltd. (FCG.NZ). The GDT Price Index, which covers a variety of products and contract periods in the auction, fell 1.8% compared with the prior auction on May 6, with the average selling price being $3,873. Dairy prices are down more than 20% since early February.
        The GDT Price Index is widely considered a market reference price for dairy products. Products on offer include whole milk powder, skim milk powder, butter, cheese and anhydrous milk fat. The result tends to impact the New Zealand dollar as dairy forms the backbone of the economy, representing around 25% of exports.
        The Kiwi also tracked the Aussie lower on a sharp drop in Aussie consumer confidence and sluggish wage growth. Mr. Hindley noted that equity markets were also weaker and that had added to the poor sentiment.
        Investors will be watching for the U.S. Federal Open Market Committee minutes and a raft of Federal Reserve speakers, including Fed Chair Janet Yellen, later in the global trading day.
        Write to Rebecca Howard at rebecca.howard@wsj.com
        (END) Dow Jones Newswires

        May 21, 2014 00:52 ET (04:52 GMT)