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NZ dollar edges higher after dairy data

NZ NewswireNZ Newswire 1/11/2016 Jonathan Underhill

The New Zealand edged up against the greenback after a busy night of mixed economic data and a surge in prices in the latest GlobalDairyTrade auction.

Traders will now turn their attention to New Zealand third-quarter labour market figures later on Wednesday morning and the looming US presidential elections.

The kiwi rose to 71.72 US cents as at 8:30am in Wellington from 71.50 cents late on Tuesday. The trade-weighted index was little changed at 77.07 from 77.05.

Whole milk powder soared 19.8 per cent in the dairy auction overnight and the GDT prices index climbed 11.4 per cent, providing good news for New Zealand's biggest export commodity, although the increase was driven by reduced milk powder volumes and the kiwi's reaction was underwhelming. B

Both the Japanese and Australian central banks left their key rates unchanged on Tuesday, while Chinese manufacturing data for October printed stronger than expected, as did the US ISM manufacturing measure.

"The market was widely expecting a fall in volumes sold thanks to the weather, which is why the NZD's response to the result was relatively muted," analysts at Bancorp Treasury Services said.

"The RBA mirrored the BOJ in standing pat in terms of action and words a week ahead of a US presidential election whose uncertainty has risen dramatically in the past week with polls showing a Trump resurgence."

Labour market data is expected to show the jobless rate fell to 5 per cent in the third quarter from 5.1 per cent.

The kiwi rose to 93.74 Australian cents from 93.55 cents, was little changed at 58.62 British pence from 58.68 pence, fell to 64.91 euro cents from 65.20 cents, dipped to 4.8497 yuan from 4.8540 yuan and declined to 74.65 yen from 74.95 yen.

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