NZ: A coalition will emerge – HSBC

The main driver of the NZD over the previous month was the general election which took place on 23 September, according to analysts at HSBC.

Key Quotes

“At the beginning of September the result seemed unclear with both the governing National Party and the opposition Labour party looking strong in the polls. As we moved closer towards the election, polls began to indicate that the National Party could hold onto power as some of the support for the opposition Labour Party faded. The NZD strengthened on each release of positive news for the incumbent party, with polls released on 12 September, 14 September and 20 September all seeing NZD-USD rise.”

“Preliminary results showed the National Party winning 58 seats, three seats short of a majority. Since the election, coalition talks have dragged on and a deal may not occur until the official results come through on 7 October, with both a National-led and Labour-led coalition still possible. This lingering political risk has put the NZD under pressure, with NZD-USD falling 2% in the two trading days after the election.”