The New Zealand dollar failed to jump significantly higher following a positive GlobalDairyTrade auction overnight as investors focused on global concerns.
The kiwi rose to 75.38 US cents at 8am in Wellington, from 75.17 cents at 5pm yesterday. The trade-weighted index increased to 78.12 from 77.93 yesterday.
Dairy product pricesadvanced an average 10 per cent in the latest GDT auction, on lower volumes, lifting the AgriHQ Seasonal Farmgate Milk Price for the 2014-15 season to $4.70 per kilogram of milksolids, in line with Fonterra's current forecast. Still, the kiwi didn't surge higher on the more positive outlook for New Zealand's largest commodity export, as investors focused on a breakdown in talks over renegotiating Greek debt, a fragile truce in Ukraine, conflict in Libya and a slump in Chinese housing prices.
"We are surprised it is not higher," said Peter Cavanaugh, client adviser at Bancorp Treasury Services. "The world is really not looking at New Zealand at the moment and if they are, they are doing so with a wary eye on the world. Investors are still seeing New Zealand in a positive light but there is enough going on to curb their enthusiasm."
Bancorp's Cavanaugh said the kiwi would push higher if dairy prices gained even as volumes stayed high.
The New Zealand dollar edged up to 96.41 Australian cents from 96.35 cents yesterday. The kiwi touched 96.66 Australian cents overnight, almost matching the post-float record of 96.77 cents it reached yesterday. Six of 13 strategists and advisers in a BusinessDesk survey yesterday said the kiwi dollar will reach A$1 this year.
The local currency was little changed at 66.08 euro cents from 66.15 cents yesterday, advanced to 49.08 British pence from 48.88 pence and rose to 89.93 yen from 89.14 yen.
