Dollar rises on Fonterra payout

The New Zealand dollar rose after dairy co-operative Fonterra increased its forecast payout to farmers to $6.05 per kilogram of milksolids, from the $5.10 announced in September.

The NZ dollar rose as high as US73.63c, its highest since October 29, on the news and finished its local session at US73.58c from US72.25c at 5pm on Friday.

"The Fonterra news came out right as the market opened and we saw it gap up a bit, and it remained bid," said ANZ chief foreign exchange dealer Murray Hindley.

The euro, Australian dollar and NZ dollar had all been stronger ahead of the Fonterra announcement as the US dollar came under pressure.

G20 finance officials failed to talk more specifically about the dollar's recent decline at their weekend meeting.

Also, a statement by the International Monetary Fund that the US dollar remained on the "strong" side, sparking another bout of selling in Asia.

Rankin Treasury expects the NZ dollar to continue to test higher levels this week as exporters increase cover.

Mr Hindley expects the NZ dollar to be strong overnight and if it can break through the NZ73.60c level the next target is around US74.50c.

The NZ dollar rose to A79.50c from A79.12c on Friday.

It was at 0.4933 euro from 0.4857 euro on Friday and 66.37 yen from 65.53 yen on Friday. The trade weighted index rose to 65.72 from 64.78.

- NZPA

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