The New Zealand dollar dropped today as the drop of dairy prices added to speculations that the Reserve Bank of New Zealand is going to cut interest rates soon.
The ANZ Commodity Price Index rose 5.1% month-on-month in September, logging the fifth consecutive monthly increase and reaching the highest level in 17 months. Meanwhile, the GlobalDairyTrade Price Index dropped 3% at yesterday’s auction to the lowest level in two months. Milk and related products are the main exports of New Zealand, and thus falling prices for dairy products are very negative to the nation’s economy.
NZD/USD fell from 0.7206 to 0.7179 as of 10:34 GMT today, trading near the lowest level since August 15. EUR/NZD rallied from 1.5538 to 1.5622, and its daily high of 1.5645 was the highest since July 29.
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