ANZ Bank lowered its milk price forecast to a range of $6.25-$6.50 per kilogram of milk solids compared to Fonterra's projected $6.75/kgMS after the GDT price index fell 1 percent in the GlobalDairyTrade auction overnight, while whole milk powder declined 0.5 per cent to US$3,014 a tonne. Prices fell after an unexpected decline in the previous sale two weeks ago. The kiwi has traded in a narrow range as the outcome of talks to form the next government drag on.
Meanwhile, the greenback gained after US September industrial production rose 0.3 per cent as expected and after reports that President Donald Trump favours Stanford University economist John Taylor, thought to be a policy hawk who would hike interest rates faster, as the next Federal Reserve chair.
"We continue to hold the view that until there is a greater degree of political clarity, moves higher are going to be difficult," said Con Williams, rural economist at ANZ Bank.
"Additionally, the softer GDT auction overnight and our milk price downgrade reinforces that some of kiwi's previous supports are fading."
The kiwi rose to 54.35 British pence from 54.04 pence yesterday after Bank of England governor Mark Carney said he expects interest rates to rise in coming months while new monetary policy committee member David Ramsden said he wasn't inclined to hike.
The kiwi rose to 91.33 Australian cents from 91.26 cents yesterday. It traded at 4.7447 yuan from 4.7290 yuan and rose to 80.42 yen from 80.27 yen. It traded at 60.88 euro cents from 60.81 cents.
