New Zealand Dollar Holds Losses
The New Zealand dollar traded around $0.555 on Thursday, after falling for the previous two sessions as the US dollar strengthened on increased bets for a Federal Reserve rate hike in December. Hotter-than-expected US inflation in October, coupled with hawkish remarks from several Fed officials, fueled expectations of tighter US monetary policy. Meanwhile, preliminary election results in New Zealand indicating the incumbent National-led coalition could retain power offered support for the kiwi, as this would likely ensure continuity in the Reserve Bank’s sole focus on inflation and the government’s spending policies. Conversely, the main opposition Labour Party’s plan to reinstate the central bank’s dual mandate of price stability and employment was viewed as a potential drag on the currency, as it could tilt monetary policy in a dovish direction given persistent weakness in the labor market. However, the outcome remains uncertain, with official results due on November 27.
The New Zealand dollar traded around $0.555 on Thursday, after falling for the previous two sessions as the US dollar strengthened on increased bets for a Federal Reserve rate hike in December. Hotter-than-expected US inflation in October, coupled with hawkish remarks from several Fed officials, fueled expectations of tighter US monetary policy. Meanwhile, preliminary election results in New Zealand indicating the incumbent National-led coalition could retain power offered support for the kiwi, as this would likely ensure continuity in the Reserve Bank’s sole focus on inflation and the government’s spending policies.
Conversely, the main opposition Labour Party’s plan to reinstate the central bank’s dual mandate of price stability and employment was viewed as a potential drag on the currency, as it could tilt monetary policy in a dovish direction given persistent weakness in the labor market. However, the outcome remains uncertain, with official results due on November 27.