New Zealand dollar sours on dairy strains

Some good news for the super-rich today as real estate in the world’s new, premier hedge-against-apocalypse – New Zealand – got a little bit cheaper thanks to a drop in the Kiwi dollar.

The currency has come under pressure in the wake of a tweet from US President Donald Trump that:

That sounds like bad news for Canada, and it probably is given the Trump administration announced earlier this week it would impose a 20 per cent tariff on lumber imports from its northern neighbour.

But markets may have already started looking ahead and thought it might not be long before Mr Trump takes aim at other big milky nations. Hello, New Zealand.

New Zealand’s NZ$12.2bn ($8.4bn) dairy industry produced 21bn litres of milk in 2015-16, according to DairyNZ. The nation is the eighth-largest milk producer in the world, accounting for 3 per cent of global production, but it is the world’s largest exporter.

Threats to New Zealand’s dairy industry are typically trouble writ large for the country’s economy, as was the case a few years ago when milk prices tanked.

At pixel time, the Kiwi dollar was down 0.8 per cent on the day in European trade at $0.6898, the first time through the 70 US cent barrier since mid-March. The currency fell 0.9 per cent on Tuesday, reacting poorly to Mr Trump’s tweet.

The Australian dollar was 0.6 per cent weaker, weighed down by inflation data that fell short of expectations.