The NZD/USD sits marginally lower, at 0.8770, thismorning. The NZD trickled lower early yesterday morning followingthe GDT global dairy auction, continuing to ease lower afterrelease of the ANZ commodity prices index yesterdayafternoon (-0.9%, June). The fall reflected not only softerdairy prices but also declines in forestry prices. This isconsistent with our forecast 10% correction in the nation’sterms of trade (from 40-year highs) over Q2/Q3 this year.However, as yet, the currency appears to be taking a fairlysanguine view of such developments. The NZD/USD soonrebounded from early afternoon lows below 0.8750. It wasnot until the USD surged higher early this morning that theNZD was jolted lower again. But the damage remainedlimited, with the NZD/USD back at 0.8770 this morning.
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