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Kiwi, other commodity currencies, take hit

NZ Newswire logoNZ Newswire 28/04/2017 Jonathan Underhill

A new $10 note. © Mark Tantrum/Getty Images A new $10 note. The New Zealand dollar was little changed below 69 US cents on Friday, having fallen along with other commodity-linked currencies as raw material prices fell and the market focussed on US President Donald Trump's protectionist approach to trade.

The kiwi traded at US68.76c at 5pm in Wellington, little changed over the course of the day, having fallen overnight from 69.10c late Thursday.

Commodity markets have been rattled by the Trump administration's imposition of new tariffs on Canadian softwood lumber and the US president's ambition to scrap the North American Free Trade Agreement.

The CRB Index of 19 commonly traded commodities fell 0.7 per cent to a five-month low overnight while on Thursday Fonterra said its milk collection "improved in March with better growing conditions across New Zealand", recording an 8 per cent gain from the same month last year to 147 million kilograms of milk solids.

"All the commodity currencies have been hammered - the kiwi more than most," said Imre Speizer, senior market strategist at Westpac.

"The big picture from quite a while ago was the US dollar going up after Trump got elected and more recently it is about protecting US trade. The feeling is he is hammering countries and products. Even if New Zealand doesn't get singled out directly, it will be felt indirectly."

He said any reaction to Fonterra's milk collection is most likely to show up at next week's GlobalDairyTrade auction. The local currency fell to A91.97c from 92.02c, which Mr Speizer said reflected the tendency for the Aussie to benefit more than the kiwi when global risk appetite improves.

The kiwi fell to 63.27 euro cents from 63.37 cents late Thursday and declined to 53.24 British pence from 53.70 pence. The local currency fell to 4.7396 Chinese yuan from 4.7651 yuan and declined to 76.42 yen from 76.87 yen.

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