The New Zealand dollar fell more than half a United States cent today following last night's global dairy auction and the release of some key economic data from the United States.
While whole milk powder prices rose 3.4 percent in Fonterra's latest auction, ANZ senior foreign exchange strategist Sam Tuck said the forward contract price for milk powder fell, pushing the New Zealand dollar lower.
"We actually saw contracts for delivery in February decling 5.7 percent. This has meant markets are focused on the fact that there has been little sign of a bounce in milk prices for future delivery. At present, in order to achieve current milk price payouts forecast, we would need to see that sort of bounce occurring."
A short time ago, the kiwi was trading at 83.90 US cents, 90.29 Australian cents, 50.52 British pence, 0.6305 euro, 86.52 yen and 5.16 renminbi.
Share prices strengthen
New Zealand shares were stronger today, with the benchmark Top 50 Index climbing 26 points to 5140.
Murray & Co director of wealth management Johnny Cochrane said as well as stronger offshore markets, profit reports have been driving prices.
"We're in the thick of earnings season right now in New Zealand and also in Australia," he said. "So reporting today was Fletcher Building, announcing a result that was perhaps slightly better than expectations, but more importantly they have now flagged a turnaround in earnings in Australia."
Shares in Fletcher Building rose 8 cents to $9.17, Mighty River Power shares eased half a cent to $2.37 and Trade Me shares rose 9 cents to $3.61.
Mighty River Power shares are still below the $2.50 price the government sold them for in last May's float.