NZD/USD rises to session high
The kiwi dollar is the top performer today, up almost 1% to 0.6616.
Earlier today, Fonterra cut its dairy price forecasts to the lowest since 2002 in what the local press called 'Black Friday'.
The good news was that the $3.85/kg forecast was better than some expectations around $3.50/kg. The surprise announcement of a 50-cent per kilogram support package for suppliers drew mixed reaction. It will spur the economy and cushion farm incomes but it comes at the expense of investment.
ANZ Bank chief economist Cameron Bagrie said the dairy industry would be hard hit. "But it's not all one-way traffic," he said, pointing to the beneficial effects of low interest rates and the impact of a weak New Zealand dollar. "But there is going to be some pretty severe pain out there."
Upbeat trading in the New Zealand dollar today despite negative risk sentiment and a price cut from Fonterra is encouraging. It's early but there is a potential double bottom forming at 0.6500 and a break of the downtrend along with 0.6739 would point to a retest of 0.7000.
