The New Zealand dollar fell after dairy product prices declined 3.1 percent at the GlobalDairyTrade auction overnight, snapping four gains for the country's largest commodity export.
The kiwi dropped to 67.49 US cents at 8am in Wellington, from 68.07 cents at 5pm yesterday. The trade-weighted index declined to 72.37 from72.94 yesterday.
Dairy product prices had climbed at the previous four auctions following nearly six months of declines. The latest fall tempers expectations for the outlook as New Zealand heads into its peak seasonal milk production period this month. Still, prices may pick up later in the season as an El Nino weather pattern crimps production, analysts said.
"With prices still below what is needed for full year forecasts to be met, the downside risks for NZD again opened up," ANZ Bank New Zealand senior economist Mark Smith and senior FX strategist Sam Tuck said in a note. "But if predictions of an El Nino event come into fruition, prices could move up sharply in the New Zealand summer months." ANZ expects the kiwi to trade between 67.10 US cents and 68 cents today.
See live rates for the NZ-US $ below. Click for more information:
New Zealand migration data scheduled for release this morning is expected to show continued strength, with annual net migration rising above August's 60,300 to a new record, ANZ said.
Credit card billing data for September published this afternoon is also expected to show ongoing growth, analysts said.
The New Zealand dollar slipped to 92.96 Australian cents from 93.71 cents yesterday, weakened to 59.53 euro cents from 60.04 cents, dropped to 43.71 British pence from 43.97 pence, declined to 80.91 yen from 81.32 yen and fell to 4.2843 yuan from 4.3286 yuan.
