Global Themes

Kiwi grounded

The New Zealand dollar collapsed yesterday after New Zealand First leader Winston Peters said he would back a Labour Party government.

NZ politics has been in a state of limbo since last month’s election with the populist NZ First party holding the balance of power after the previous National government lost its majority.

The move lower in the kiwi compounds NZD losses since the election. The NZDHKD is down 5.2% since the 23 September election.

Mostly higher

The USD stronger as it traded to one-week highs.

The US dollar continued to be boosted by higher US bond yields.

The euro jumped higher ahead of next week’s European Central Bank meeting.

The Aussie was mostly higher, boosted by flows in the AUDNZD.

Into the unknown

From here, financial markets will be on tenterhooks as US president Donald Trump nears his appointment of the next Federal Reserve chair.

Trump spoke with current chair Janet Yellen overnight and speculation centres on Yellen, Stanford University economist John Taylor and Fed board member Jerome Powell.

The eventual appointment is likely to have a big impact on the US dollar and could come at any time.

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