The kiwi was trading at US71.66c at 5pm today. Photo / 123RF
The New Zealand dollar is heading for a 1 per cent decline this week after shedding 4.5 per cent in August as election uncertainty rises with the latest political polls.
The kiwi was trading at US71.66c at 5pm today versus US71.79c at 8am and from US71.68c late on Thursday. It
was at US72.38c a week ago in New York. The trade-weighted index was at 75.05 from 75.27.
The New Zealand dollar came under pressure last month when weak data led the market to pare back its expectations for upcoming rate hikes. While investors were disappointed when the central bank kept the official cash rate at 1.75 per cent with future projections unchanged, the kiwi failed to recover as tensions between the US and North Korea sapped any risk appetite. It was then weighed down when Treasury scaled back projections for economic growth in the pre-election fiscal update.
"The NZD was a clear underperformer during August, falling against all the major currencies we closely follow," said BNZ senior markets strategist Jason Wong. "We don't think there was any one specific driver behind this performance - we think it probably reflects the combination of poor trader positioning at the start of the month and the cumulative impact of a number of slightly NZD-negative forces."
The latest blow - which pushed it to a three-month low - came when the latest Colmar Brunton Poll put support for Labour at 43 per cent late on Thursday, ahead of National on 41 per cent while Jacinda Ardern is ahead of Bill English as preferred Prime Minister at 34 per cent to 33 per cent. "The poll was definitely very negative for the New Zealand dollar", said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank.
