Summary:

• Fortnightly GDT auction: -3.4%
• Second consecutive large decline 
• NZD holding up relatively well however

The latest GDT auction results are in with the price index showing a second consecutive large drop in coming in at -3.4%. The result is very similar to the prior reading of -3.5% and together they represent a substantial decline in the global dairy benchmark in the past month. In fact the last four readings have all been negative and there are growing signs that the price is in a downtrend. 

 The last two readings for the GDT price index have shown large declines. Source: globaldairytrade.info

Despite the decline the New Zealand dollar has been on the rise today with the Kiwi appreciating against most of its peers. The largest gains can be seen against the Euro and the US dollar. 

 The NZD is moving higher despite the fall in GDT. Source: xStation

The gains seen in NZDUSD have seen the market move back to a prior support zone around 0.6840. A break back above here would be a positive development and may see the recent break lower labelled as false which may in turn lead to a recovery. However, a failure to move and end the day above 0.6840 would keep the pressure on the market and could see more declines going forward. 

 The NZDUSD is looking to recover from its lowest level of the year. 0.6840 could be a key level to keep an eye on. Source: xStation