THE New Zealand dollar gained after Fonterra Cooperative Group lifted its forecast payout to farmers next year.The kiwi rose to 83.32 US cents at 5pm in Wellington from 83.12 cents at 8.30am and 83.24 cents on Friday in New York.
The trade-weighted index advanced to 74.63 from 74.51 last week.
Fonterra raised its forecast farmgate milk price by 25 cents to $5.50 per kilogram of milksolids and said the forecast net profit would be 40-50 cents per share, in line with its recent prospectus, after global dairy prices rallied through the tail-end of the year.
The dairy exporter sees more growth as extreme weather conditions around the world cut supply of wheat and grain, which are expected to feed into higher dairy prices.
As part of a new regulatory regime, Fonterra will provide quarterly updates on its forecast payouts.
New Zealand's currency may trade in a range of 82 cents to 84 cents this week, according to a BusinessDesk survey of six traders and strategists.
Three saw the kiwi going higher and three said it may struggle to break out of its recent range.
New Zealand's dollar hasn't traded above 83.50 US cents since early March and if it can break through that level it has room to make further strong gains.
Investor sentiment was bolstered by strong Chinese manufacturing with official data Sunday showing industrial production climbed 10.1 per cent in November from a year earlier. Still, slowing exports figures today dulled investors' optimism about China.
The kiwi dollar gained to 64.57 euro cents from 64.39 cents last week and was little changed at 51.97 British pence from 51.91 pence.
The local currency increased to 79.53 Australian cents from 79.41 cents and traded at 68.69 yen from 68.62 yen.