NZD: Dairy auction results, jobs weigh - Westpac

FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, reviews the latest price moves in both the Australian and New Zealand Dollar.

Key Quotes

"AUD/USD held around 0.9335 into the London morning but then followed the broad USD trend, falling as far as 0.9294 in NY as equities slid. The kiwi underperformed. NZD/USD fell from 0.8530 to 0.8452, steadying only 10 pips higher. AUD/NZD rose from a 1.0940 low to probe 1.1000 during the London afternoon, with kiwi selling accelerating following the dairy auction results, where whole milk powder prices fell a startling -11.5% to be -45% since February. Our NZ economists are reassessing their current NZD6.00/kg payout forecast for FY14/15 but note that they continue to expect higher prices later this year."

"NZD/USD then whipsawed on New Zealand’s Q2 employment data. The pair was 0.8450 before the data, jumped to 0.8475 on the lower than expected unemployment rate (5.6% vs f/c 5.8%), tumbled to 0.8428 on the sub-consensus rise in jobs (0.4% vs f/c 0.7%) before creeping back to 0.8440. Obviously the participation rate fell notably, 68.9% from a revised 69.2% in Q1."