Selling of the New Zealand dollar accelerated, knocking another 1 per cent off the currency’s value as investors repositioned to the nation’s political shift.
“Both Labour and NZ First are looking to revamp the Central Bank by appointing outside director while moving away from the single decision-maker model,” said OANDA’s Stephen Innes, adding that “spooked” investors.
“The profundity of this political swing is no small matter as the coalition could bring about a dual mandate for the RBNZ incorporating a full employment target alongside the traditional inflation target and likely currency consequences,” Mr Innes said. “So far there has been little appetite to buy the dip while traders remain in ‘sellindipity’ mode expecting an extension of the current trend.”
The Kiwi was 1 percent lower at US69.59¢ in recent trade, falling below the US70¢ mark for the first time since late May. The currency has plunged 7.9 percent since its 2017 peak of US75.58¢ in late July.