The NZD/USD has strengthened over the past 24-hours to sit just below 0.8260 currently. Yesterday’s ANZ commodity price index showed that NZ commodity prices remain elevated. Although world prices for NZ’s main primary exports eased 0.4% in November, prices are up 21.4%y/y. Prices for all major categories are well up on a year ago, with aluminium the exception. Certainly commodity prices are strong enough to suggest that NZ’s terms of trade pushed even higher in Q4 from the 40-year high recorded in Q3, shown yesterday. This remains a key support for the NZD. Overnight, the latest global dairy auction also showed average prices rising 3.9% from the previous event. The NZD was also a beneficiary of broader USD weakness overnight. This saw the NZD/USD climb steadily, to sit just below 0.8260 at present. Our end year target for the NZD/USD remains at 0.8400. The NZD continued its bounce relative to key European peers. The dip in the NZD/GBP below 0.5000 has proved short-lived. This cross sits at 0.5030 this morning
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