New Zealand Dollar Steady Late, Helped by Treasury Update

 
 
   By Rebecca Howard 
 

        WELLINGTON, New Zealand--The New Zealand dollar was largely unchanged late Tuesday after getting a lift from the half-year economic and fiscal update.
        In late Wellington trading, the New Zealand dollar was at US$0.7752 versus US$0.7745 late Monday. It was at A$0.9414 compared with A$0.9420 late Monday.
        The Treasury now expects the government to post an operating deficit before gains and losses of NZ$572 million in the year to June 2015 versus a small surplus of NZ$297 million forecast in a pre-election update last August, but the economic forecasts "were pretty solid," said Auckland-based ANZ Bank senior foreign exchange manager Sam Tuck.
        The Treasury sees growth at 3.5% in the 12-months to March 2015 versus a forecast of 3.8% in the pre-election update. The economy is then expected to grow 3.4% in the year to March 2016, up from the prior forecast of 3.0%.
        While the update gave the Kiwi a slight lift "markets are very reluctant to buy either the NZD/USD or AUD/USD at the moment, given what's happened to the Russian ruble, the Turkish lira, the Colombian peso, all of those sort of currencies," said Mr. Tuck.
        He said the focus will now be on the GlobalDairyTrade auction overnight.
        ANZ says prices may improve given that there is less product on offer but they need to rise significantly between now and August 2015 for dairy giant Fonterra to be able to maintain its current forecast payout for its 10,600 farmer shareholders. "So time is ticking and while dairy markets can turn on a dime, the forecast seems very ambitious to us," it said.
        Write to Rebecca Howard at rebecca.howard@wsj.com
        (END) Dow Jones Newswires

        December 15, 2014 23:25 ET (04:25 GMT)

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