NZ Dollar Opens Sharply Lower as China Bans Imports from Fonterra

The New Zealand dollar was rising today, but this should not deceive traders as the currency opened sharply lower after China and Russia banned imports of milk powder from Fonterra Cooperative Group Ltd.
Fonterra reported on the weekend that a rare bacteria that may cause botulism was found in a whey protein made at a New Zealand plant last year. This announcement caused bans of Fonterra products in China and Russia. It should have a very negative impact on the New Zealand economy and currency in a short term as dairy products is one of the major sources of export revenue for the country.
NZD/USD traded at 0.7790 as of 8:41 GMT after closing at 0.7829 on Friday and opening at 0.7748 today. NZD/JPY closed at 78.52 last week and traded at 76.70 today, near the opening level.

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