NZ dollar slips ahead of dairy auction, US payrolls   30 Mar 2015

NZ dollar slips as traders look ahead to dairy auction, US payrolls

By Jonathan Underhill

March 30 (BusinessDesk) - The New Zealand dollar fell ahead of key US manufacturing and employment reports, and before a dairy auction where buyers will have to absorb increased volumes of milk powder on offer.

The kiwi fell to 75.39 US cents as at 5pm in Wellington, from 75.58 cents at the New York close on Friday. The trade-weighted index fell to 78.95 from 79.16.

The US is scheduled to release its PMI and ISM manufacturing surveys for March, as well as ADP private payrolls figures, which are a precursor to the official payrolls data on Friday. The world's biggest economy probably stacked on 260,000 jobs this month, while the jobless rate fell to 5.4 percent from 5.5 percent, UBS economists forecast, while manufacturing probably remained in expansion. Last week, Federal Reserve chair Janet Yellen repeated that interest rates are likely to rise this year, but not at a pace that would choke off growth.

"Fed speakers are gearing the market up for a rate increase, but at the same time ensuring markets don’t get too far ahead," said economists at ASB Bank, in a note.

In a relatively quiet week for domestic data, "we suspect only an unexpectedly good or bad result in the dairy auction would move the NZD significantly," they said. "Beyond this event, NZD direction this week is likely to be a function of US developments."

Last week Fonterra Cooperative Group said it would add 12,140 tonnes of powder to the GlobalDairyTrade auction over the next 12 months, with 90 percent of the increased volume added in the coming three months. Most of the increase was in whole milk powder, with an additional 6,230 tonnes added over the next three months, it said. Whole milk powder futures dropped on the NZX following the announcement. The GDT auction results will be released in the early hours of Thursday morning, NZ time.

The kiwi fell to 50.73 British pence from 51.03 pence at 5pm on Friday. It rose to 97.53 Australian cents from 97.13 cents on Friday.

The local currency slipped to 69.37 euro cents from 69.67 cents on Friday and weakened 89.86yen from 90.43 yen.

(BusinessDesk)

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