China Milk Powder Reports sees N.Z. Dollar Drop

The New Zealand dollar fell against its 16 major peers after reports that China has destroyed some milk powder imported from the South Pacific nation.

The so-called kiwi dropped versus the U.S. dollar and yen after Beijing News reported China’s quarantine administration destroyed milk powder from three different brands, citing the government agency. Australia’s dollar gained after the country’s central bank said stronger demand from China and an improved global outlook have spurred prices for commodities.

“This is not a case of China singling New Zealand out but the headlines are having a negative impact on the kiwi,” said Khoon Goh, a senior strategist in Singapore at Australia & New Zealand Banking Group Ltd. “This is temporary and once some clarity around this news story emerges, I expect kiwi to regain those losses.”

Bloomberg

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