New Zealand Dollar Slips Ahead of Election

The New Zealand dollar slipped to $0.558 on Friday after settling 0.5% lower in the previous session as investors braced for the general election on Saturday. Polls show the governing centre-right National Party and opposition centre-left Labour Party neck and neck, with neither having a clear path to victory. This has raised concerns over potentially prolonged coalition negotiations and uncertainty surrounding the next government’s economic and fiscal policies. With neither major party outlining concrete measures to stem the currency’s decline, traders expect the kiwi to remain under pressure. The kiwi has fallen nearly 3% so far this year, making it one of the worst-performing G10 currencies amid sluggish economic growth and a soft labour market. Meanwhile, the Reserve Bank of New Zealand’s unexpected split decision to leave its official cash rate unchanged last week has further clouded the policy outlook and added to the currency’s woes.