The NZD/USD has rebounded to 0.8370 this morning, inthe backdrop of a broadly weaker USD overnight. Fonterra’s announcement yesterday afternoon wasprimarily focused on strategy, and its intention to take a20% stake in Beingmate in China, and invest more in its NZprocessing capacity. However, it did also restate its milkprice forecast at an unchanged $6. This was above generalexpectations, although Fonterra did say market conditionswere difficult and downside risks remain. We agree.However, the lack of a killer blow in the announcementhelped start the NZD/USD on an upward path yesterdayafternoon. This was enhanced by broad USD weaknessovernight. The NZD/USD has traded up to 0.8370 thismorning.
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