NZ Dollar Extends Slide On Weaker Commodity, Dairy Prices
The New Zealand dollar continued to be weaker against the other major currencies in the Asian session on Wednesday following the decline of the prices of dairy products and other commodities.
In the overnight GlobalDairyTrade auction, the prices of dairy products fell 2.9 per cent to $US2190 a tonne. This was the fifth decline in the six auctions held so far in 2016. Meanwhile, the global milk glut showed little signs of abating.
Moreover, the price of commodities including oil and gold also declined. Crude oil price fell amid renewed concerns about the global supply glut.
Investors are reluctant to take positions ahead of the remaining two central bank meetings this week.
The U.S. Federal Reserve will conclude its two-day monetary policy meeting on Wednesday and the Bank of England will wrap up its meeting on Thursday. The Fed is widely expected to leave interest rates unchanged, but traders will pay close attention to the wording of the accompanying statement.
Tuesday, the NZ dollar fell 1.12 percent against the U.S. dollar, 1.75 percent against the yen and 1.18 percent against the euro.
In the Asian trading, the NZ dollar fell to more than a 6-month low of 1.1318 against the Australian dollar, more than a 2-week low of 0.6576 against the U.S. dollar and nearly a 4-week low of 1.6872 against the euro, from yesterday's closing quotes of 1.1290, 0.6598 and 1.6819, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.14 against the aussie, 0.64 against the greenback and 1.70 against the euro.
Against the yen, the kiwi edged down to 74.62 from yesterday's closing value of 74.63. The kiwi may test support near the 73.00 region.
Looking ahead, U.K. unemployment data and Eurozone construction output, both for January, are due to be released later in the day.
In the New York session, U.S. housing starts, CPI and industrial production data, all for February and crude oil inventories data are slated for release.
At 8:30 am ET, U.K. Finance Minister George Osborne will announce the 2016 annual budget in London.
At 1:30 pm ET, National Bank of Poland chief Marek Belka and European Central Bank chief Mario Draghi is expected to speak at the opening of an art exhibition in Frankfurt.
At 2:00 pm ET, the Federal Reserve will announce its decision on monetary policy. The Fed is expected to hold rates at 0.50 percent, while tapering its monthly bond buying program by $10 billion to $35 billion.
Following the announcement, Fed Chair Janet Yellen will hold the post-meeting press conference at 2:30 pm ET.
The material has been provided by InstaForex Company - www.instaforex.com
