NZ dollar little changed as next poll awaited

Simon O'Connor

NZ dollar little changed as next poll awaited

The kiwi was trading at US72.88 cents as at 8am today in Wellington from US72.27c before the poll was released yesterday.

The Newshub-Reid Research poll showed support for National rose 4 percentage points to 47.3 per cent while Labour fell 1.6 points to 37.8 per cent. The New Zealand dollar has fallen about 5 percent against the Australian dollar since Jacinda Adern replaced Andrew Little as Labour leader on August 1 although traders say the cross-rate had already found strong support at around 89.70 Australian cents from exporters and market participants exiting short positions on the cross rate (ie betting the Aussie would rise vs the kiwi). "Orders were absorbing the trades and then we had a poll with National ahead and boom".

Traders said the kiwi would have extended its gains if not for a resurgent USA dollar.

He said tomorrow's poll may show National regained ground from Labour in the past week.

"There was a bit of a reality check this morning that this is just one poll and polls are not reliable", said Rodrigo Catril, forex strategist at National Australia Bank.

Both parties would need to rely on the nationalist New Zealand First Party to form a coalition government under the country's proportional representation system as the winning party or parties need 61 of parliament's 120 seats to form government.

Meanwhile, the NZX 50 index ended 0.17 percent lower at 7,827.43, while at 05:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 68.66 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). It also didn't move much against the Aussie after Westpac-Melbourne Institute consumer sentiment index rose 2.5 percent this month. It gained to 60.81 euro cents from 60.43 cents and rose to 4.7543 yuan from 4.7272 yuan. It traded at 54.88 British pence from 54.83p.

The two-year swap rate rose 1 basis point to 2.15 percent while 10-year swaps rose 4 basis points to 3.10 percent.

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