Kiwi jumps as Russia lifts ban on NZ dairy

The New Zealand dollar enjoyed more than 40 pips worth of gains on Tuesday after Russia decided to allow 29 New Zealand companies to sell dairy products to Russia, partly lifting a ban which had been operating for two years.

A number of New Zealand dairy companies will feel a huge relief after Russia decided to allow them to sell products into Russia as of Monday, raising hopes for New Zealand's embattled dairy sector. Only a number of dairy products will be allowed to sell into Russia, including water-free butter fat, whey protein concentrate, and milk protein concentrate, which are not produced in Russia.

Russia put a ban on New Zealand dairy products following a botulism scare by New Zealand dairy giant Fonterra in August 2013. The removal of the ban will be hugely welcomed by New Zealand's dairy sector which has put up with a 70% tumble in global dairy prices over the last two years.

Fonterra's next fortnightly Global Dairy Trade (GDT) auction is set to take place on Wednesday morning New Zealand time. Prices have fallen 9.3% and 10.7% at the last two auctions.

NZDUSD is currently trading at 0.6596 levels. It made intraday low at 0.6570 and high at 0.6605 levels.