New Zealand Dollar Weaker, Weighed By Milk Auction

 
 By Rebecca Howard 
 

        WELLINGTON, New Zealand--The New Zealand dollar was lower late Wednesday, weighed by an ongoing slide in global dairy prices and other commodities.
        "The milk auction is the primary driver, but the broader commodity complex is also weighing on commodity currencies. It's not going down in isolation," said ANZ senior manager FX Sam Tuck.
        In late Wellington trading, the New Zealand dollar was at US$0.7867 versus US$0.7941 late Tuesday. It was at A$0.9080 versus A$0.9104.
        International dairy prices fell in the overnight Internet-based auction for Nov. 18 on GlobalDairyTrade, 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 3.1%, compared with the previous auction on Nov. 4, and the average selling price was US$2,561.
        The average selling price for whole-milk powder was US$2,400 a metric ton, down 5.1% compared with the prior auction.
        The weaker dairy prices have shored up expectations that Fonterra will likely lower its forecast payout to its 10,500 dairy farmers for the current season. Fonterra has said it will pay NZ$5.30 per kilo of milk solids but has said it will review its forecast in December. Earlier Wednesday ASB Bank revised its forecast down 40 New Zealand cents to NZ$4.70/kg of milk solids.
        Mr. Tuck noted that markets are now awaiting the FOMC minutes. "There is an expectation that the minutes will be relatively optimistic.... and continue to focus on policy normalization being needed at some point in the future, which is probably pretty well priced in," said Mr. Tuck.
        Write to Rebecca Howard at rebecca.howard@wsj.com
        (END) Dow Jones Newswires

        November 18, 2014 23:29 ET (04:29 GMT)

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