The NZD followed the AUD in an overall drift lower yesterday,with few outright drivers. The NZD/USD is 0.2% lower at0.8646.Certainly there seems to have been no knee-jerk reaction to what we saw as a significant result in Fonterra’s Global DairyTrade auction overnight. Prices fell by 8.9%, the fourthconsecutive decline. Note that the declines have becomesteeper at each of the past four auctions. We thought a furtherdecrease at this auction might’ve been too much to hope for,given that prices had fallen by 10% over the past threeauctions. But this latest result gives us some comfort in ourcore view that declining commodity prices over 2014 shouldapply downward pressure to the NZD.
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