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April 5, 2016 - Written by Minesh Chaudhari

Global Dairy Trade Auction to Provoke NZD Exchange Rate Volatility



Today’s session promises to be a market-moving one for the Antipodean Dollars, with the publication of a brace of data sets Down Under.

The latest GlobalDairyTrade auction results are due for release just before the start of the European session and investors holding New Zealand Dollar (currency : NZD) assets will be closely-monitoring the situation.

The number one export from the Land of the Long White Cloud remains Whole Milk Powder (WMP) – any increase from the last WMP auction closing price of $1,971 two weeks ago will favour the Kiwi Dollar, potentially sending the Pound Sterling New Zealand Dollar exchange rate down towards the psychologically significant two to one threshold.

The latest Reserve Bank of Australia (RBA) monetary policy announcement follows shortly after the GlobalDairyTrade auction results. With the market pricing in a maintenance of the status quo, (i.e. the cost of borrowing remaining at its current level of 2.00%), any change to Australian interest rates would represent a major surprise. Such an outcome would therefore have a pronounced effect on the Sterling to Australian Dollar exchange rate.

However, the main market-moving element of the release could prove to be the tone of the rhetoric contained in the accompanying minutes, with a dovish bent sending the GBP AUD rate sharply higher.

US Dollar Exchange Rate: US Services Data in Focus<.h2>

The other stand-out risk events this week come from North America; look this afternoon’s ISM survey of America’s services sector to provide some direction for the US Dollar (currency : USD), while Thursday afternoon’s appearance from current Federal Reserve Chair Janet Yellen alongside former Fed chiefs Greenspan, Bernanke and Volcker could provide investors with significant clues regarding the future policy path from the US central bank.

Finally, Canadian jobs data on Friday afternoon has the potential to alter the relative value of the Canadian Dollar (currency : CAD). Analysts expect the data to show that overall joblessness in Canada remained at 7.3% last month.

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