The New Zealand dollar slipped as milk prices declined to the low last seen more than five months ago. The currency also weakened as concerns about slowdown of China’s economy turned investors’ sentiment to risk aversion.
Fonterra Cooperative Group Ltd., the biggest dairy exporter in the world, reported that prices for milk powder delivered in May fell to $3,316 per metric ton, the lowest level since October 5. The kiwi (as the New Zealand currency is often nicknamed) declined also on signs of slowdown in China. The Asian country is the second largest trading partner of the New Zealand, therefore the kiwi tends to react strongly on the news from China.
Not everything is bad for New Zealand and its currency, though. Nation’s gross domestic product demonstrated annual growth of 2.2 percent in the fourth quarter. That’s the fastest pace in almost four years. The growth was caused by the Rugby World Cup that was hosted in New Zealand last year.
NZD/USD traded at 0.8197 as of 1:30 GMT today, following the drop from 0.8261 to 0.8167 yesterday. EUR/NZD was up from 1.6013 to 1.6174 on the previous trading session and stayed near that level today. NZD/JPY traded at about 68.51 on today’s session after falling from 68.87 to 68.34 yesterday.
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2012-03-21, 13:14
NZ Dollar Slides with Milk Prices
