Fonterra forecast a key New Zealand dollar risk

Fonterra expected to leave milk forecast unchanged

New Zealand milk collective Fonterra will report first half results tomorrow and economists expect the company to stick to its $4.70/kg milk price forecast unchanged.

At the most recent GlobalDairyTrade auction, prices fell 8.8% but production is rising and helping to offset the decline. The low price is near the breakeven for many farmers but most expect a rebound to around $6.50/kg in 2015-16. Comments on that front rather than the current outlook may have a larger impact on the kiwi dollar.

Also look to the Chinese manufacturing PMI results as a driver in the commodity currencies in the day ahead.