New Zealand Dollar Tad Weaker; Focus On Japan, Dairy Prices

 
   By Rebecca Howard 
 

        WELLINGTON, New Zealand--The New Zealand dollar was slightly weaker but holding firm ahead of news from Japan and the overnight GlobalDairyTrade auction.
        In late Wellington trading, the New Zealand dollar was at US$0.7941 versus US$0.7986 late Monday. It was at A$0.9104.
        "We are waiting for an announcement and that's propping everything up at the moment," said Stuart Ive, OM Financial senior client advisor. Markets expect Japanese Prime Minister Shinzo Abe to say he will put off a planned sales-tax increase. He is also set to call for a general election on Dec. 14 to renew his mandate for an all-out assault on deflation, which has combined with falling wages and weak demand to keep Japan's economy sluggish.
        "The Kiwi is benefiting from the cross-yen trades coming through and the carry trade may be coming back into play," said Mr. Ive.
        Later in the global trading day, markets will focus on the overnight GlobalDairyTrade auction for any clues on whether milk prices are stabilizing.
        According to ANZ Bank, global milk prices looked to have bottomed out "but there is still no catalyst for a strong upturn in prices in the near term." It notes farm-gate prices haven't adjusted materially lower in Europe and the U.S. as yet, meaning suppliers aren't getting incentives to cut supply. Lower grain prices are also helping Northern Hemisphere margins. Russian sanctions are continuing to rattle the market, and there have been good seasonal conditions in New Zealand and Australia so far.
        Write to Rebecca Howard at rebecca.howard@wsj.com
        (END) Dow Jones Newswires

        November 18, 2014 00:09 ET (05:09 GMT)