Sustained NZD run up will become problematic for the export sector – ANZ

By FXStreet Research Team at ANZ, suggests that the NZD has crept back in focus for exporters and the RBNZ alike.

Key Quotes

“For exporters the run back up above NZDUSD 0.69 and to 73.3 on the NZD TWI is proving eye watering. For dairying, the sector under the most pressure at present, the run back up is especially painful as a lower NZD is a key reason that a better income outlook in 2016/17 has been flagged. If this doesn’t prove to be the case there will be serious industry concern.

While the dairy and the sheepmeat sectors remain under pressure, prospects elsewhere range from steady to stellar. New Zealand’s meat supply volumes are expected to be down by close to double digits, but this is helping to support prices and further gains are anticipated. The main horticulture crops are on track to post impressive yields, and combined with solid prices, are likely to deliver very profitable returns.

Forestry prices are being supported by domestic building activity and shipping rates at multi decade lows are helping. The high NZD doesn’t seem to be putting off tourist flows either, although there will be an impact on spending. Individually these export earners don’t totally …read more

Source:: FX Street