Asia Recap: Kiwi shines back, Euro makes new lows

By FXstreet.com | August 26, 2014 AAA

FXStreet (Bali) - The New Zealand Dollar was the star of the session, finally getting back some of its lost shine in response to a global strategy shift by NZ Fonterra.

NZD/USD saw its highest being printed at 0.8363, off a 0.8320 low seen in the US session as a consequence of positive US data, following the news that Fonterra is creating an infant formula partnership with China's food manufacturer Beingmate Group.

Fonterra also announced an unchanged forecast for milk payout during 2014/15. Chief Executive Officer Theo Spierings said: "Our strategy is to increase earnings by driving more milk volume into higher value categories globally by turning the wheel from commodities to higher-margin products."

The agreement, in words of Spierings, "is a game changer that will provide a direct line into the infant formula market in China, which is the biggest growth story in pediatric nutrition in the world."

With respect to other pairs, amid the absence of economic indicators that may stimulate order flow, AUD/USD traded slowly but steadily upwards, adding additional pressure towards 0.9330-40 key resistance, still some 20 odd pips away from current price at 0.9320 (near session highs of 0.9322).

EUR/USD was again hammered into new lows, with talk of a 1.3150 barrier apparently helping to contain the decline by producing a mild bounce towards 1.3660-65. USD/JPY lost marginally the 104.00, although the market still looks quite bullish.

In other fundamental news, Russian President Putin crossed the wires saying that discussions were underway with Ukraine’s Poroshenko for a swift end to bloodshed in Ukraine. In New Zealand, July Food Price Index came at -0.7% m/m vs +1.4% expected, while in Australia, Q2 Construction Work Done posted a decline of 1.2% q/q vs -0.5% expected. In China, Westpac MNI China Consumer Sentiment Index was -1.3% m/m in August.

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