Speculation about rising prices at New Zealand's GlobalDairyTrade auction due Wednesday, 16th Mar is driving NZD higher against the Australian dollar. AUD/NZD was down around 0.22% mid-way through the European session, trading at 1.1227 at 1200 GMT.
Milk powder futures on the NZX are up between 1 percent and 2 percent, suggesting prices of dairy products are set to rise for the second auction in a row after four straight declines.
At the previous twice-monthly auction the average milk powder price on which Fonterra bases its payout to farmers fell by 2.8 percent to $US2235 a tonne. It was the fourth consecutive time in the year.
“There’s just a hint of buying interest from these dairy prices. Outside of the US dollar, the kiwi is a fraction firmer ahead of the dairy auction,” said Graham Parlane, a dealer at OMF.
