New Zealand Dollar (NZD) Exchange Rates Broadly Softer
The New Zealand Dollar exchange rate recorded losses against the Euro and the Pound, while managing to remain higher against the Australian Dollar after dairy events boded badly for the Kiwi economy.
Dairy giant Fonterra surprised markets when it announced that it had not only lowered it’s estimated milk payout, but it had also downwardly revised its next season opening milk price from the current $7 to only $5.25.
A quick foreign exchange market summary before we bring you the rest of the report:
On Thursday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.857
Today finds the pound to euro spot exchange rate priced at 1.167.
The pound conversion rate (against australian dollar) is quoted at 1.915 AUD/GBP.
The pound conversion rate (against us dollar) is quoted at 1.251 USD/GBP.
Please note: the FX rates above, updated 25th Apr 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.
Dairy Price Strain Pushes NZD/GBP, NZD/EUR Lower
Fonterra Chairman John Wilson commented: ‘World markets are over-supplied with dairy commodities after farmers globally increased production in response to the very good prices paid 12-18 months ago. This supply imbalance had heightened due to continuing good growing conditions in most dairy producing regions. We expect prices to recover going forward, and to see a rebalancing of supply and demand over the season.’
However, it seems as if the outlook for dairy prices is tilted to the downside with suggestions that values could soften even further. In the past 12 months alone, the price of dairy products has tumbled by around 50%.
Fonterra Chief Executive Theo Spierings commented: ‘The real concern for me is key importing regions like China, Russia, Middle East, Africa when are they really back into the markets? So it’s more of an amount issue than a supply issue in my opinion.’
Meanwhile, the ‘Aussie’ exchange rate softened when Private Capital Expenditure figures fuelled speculation that the RBA would be cutting rates again soon. In the first quarter of 2015, capex fell by -4.4%, one of the biggest drops recorded since 2009. The RBA recently cut borrowing costs by 0.25% and much of the market expects another cut to follow shortly. With a lack of highly influential Australian domestic data out this week, the ‘Aussie’ exchange rate is likely to fluctuate on global developments.
Greek Negotiations Drag on, Euro Pressured
In Europe, Greek negotiations continued on Thursday with a divergence of opinion between Athens and the rest of Europe. Greece stated that they were in the ‘final stretch’ of talks and were drawing up plans, while Germany’s finance minister announced he was surprised that Athens felt they were close to an agreement as such little progress had been made. Investors will continue to eye talks today as they continue.
Meanwhile, the Pound is expected to have a major day of movement with the release of the UK’s GDP figures. The UK is expected to register 2.5% growth in Q1 on the year and could be a development to help the Pound rally.
New Zealand Building Permits data will be out later on Thursday.
Australian New Home Sales data will follow on Friday.