NZD/USD is sitting just above important support at .8420 and AUD/NZD is still hanging on to the topside of a trend channel (comes in today around 1.1095). Most of the focus in early Asia will be on NZD/USD. Here’s the RBS take on the dairy auction.
Overnight the GDT dairy auction prices showed some tentative signs of stabilisation. The TWI declined by 0.6% with four products registering declines and three improving. Importantly, wholemilk powder showed the first signs of stabilisation in two months, bouncing off recent lows to be up 3.4% to US$2,804/t. There was improvement across all contract periods, except for February. However, the slope of the curve was only slightly upward pointing and combined with a 12% fall in skimmilk powder prices only portrays of bargain hunting and consolidation as opposed to a strong recovery. A bounce back is required if Fonterra’s current farm-gate milk price of $6/kg ms is to be achieved as there is still a material gap between this and the prices achieved in the last two auctions.