Aussie, kiwi turn biggest losers on month as commodity ties bind

[SINGAPORE] The New Zealand and Australian dollars slumped after Fonterra Cooperative Group Ltd, the world's biggest dairy exporter, forecast a lower-than-expected payout to its farmer shareholders.

The kiwi and the Aussie have fallen the most in May among developed-market peers as traders increased bets for higher interest rates in the US this year. Prices of iron ore, Australia's biggest export earner, have also dropped more than 20 per cent this month.

The kiwi slid 0.3 per cent to 67.18 US cents at 10:09 am in Tokyo, after reaching 67.05, the weakest level since March 28. The currency has depreciated 3.7 per cent this month.

The Aussie slipped 0.1 per cent to 71.88 US cents, having tumbled 5.5 per cent since the end of April.

"The New Zealand dollar is now challenging pivotal support and could accelerate through 67 cents, although support remains evident all the way down to 66 cents," said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand in Auckland.

"The Australian dollar has drifted off in sympathy."

BLOOMBERG