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5 Aug 2013
Flash: China's ban on NZ dairy could have severe consequences for the Kiwi - UBS
FXstreet.com (Barcelona) - As UBS Strategist Gareth Berry reports, it is unclear at this stage for how long the Chinese ban over NZ dairy products will remain in force, but in theory "the consequences could be quite severe for the New Zealand
dollar unless it is lifted within a week or two" the Strategist said.
Key Quotes
"The news is particularly worrying given China is by far New Zealand's biggest export market for dairy products. The next biggest importer of NZ dairy - the USA - imports six times less than China."
"We remain short AUDNZD - especially ahead of Tuesday's RBA policy decision and Thursday's Australian employment report. However, as a precaution, we took some profit on our AUD put / NZD call trade recommendation overnight by converting it to a put spread, with 1.1000 the downside strike."
"We now await the next fortnightly NZ dairy auction, with results due on Tuesday at approximately 14:00-15:00 GMT. The New Zealand dollar is likely to suffer a further sell-off if dairy demand drops sharply."
dollar unless it is lifted within a week or two" the Strategist said.
Key Quotes
"The news is particularly worrying given China is by far New Zealand's biggest export market for dairy products. The next biggest importer of NZ dairy - the USA - imports six times less than China."
"We remain short AUDNZD - especially ahead of Tuesday's RBA policy decision and Thursday's Australian employment report. However, as a precaution, we took some profit on our AUD put / NZD call trade recommendation overnight by converting it to a put spread, with 1.1000 the downside strike."
"We now await the next fortnightly NZ dairy auction, with results due on Tuesday at approximately 14:00-15:00 GMT. The New Zealand dollar is likely to suffer a further sell-off if dairy demand drops sharply."