What’s next for the new zealand dollar after the decline of today — BTMU




The political twists and turns, New Zealand

BTMU FX Strategy Research examines the short-term outlook for the NZD in the light of the latest developments of the political situation.

«The policies advocated by the Labour Party are suddenly in focus today, after it was announced that it had reached an agreement with New Zealand First to form a government. This means that the largest National party, with 44.4% of the votes, will be in the opposition.

A difference National, which now becomes more realistic is the Labour Party policy to change the mandate of the RBNZ to include a component related to employment, essentially to copy the dual mandate of the Fed. This would certainly increase the prospect of an easing of monetary policy to come. However, the unemployment rate at 4.8%, it is unlikely that a change in the mandate would be to change in the short-term expectations about the policy outlook.

The New Zealand dollar was the worst performing G10 currency relative to the dollar, so that we might be surprised to see significant sales from today to the significant drop,» BTMU argues.

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