Kiwi dollar falls as Clinton victory hopes bolster greenback

The kiwi has recovered after selling off in the wake of the Reserve Bank's reiteration last week. Photo / iStock

The New Zealand dollar fell as US presidential election polling showed Hilary Clinton taking the lead, boosting demand for the greenback on optimism the Democrat candidate would be better for the powerhouse global economy.

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The kiwi dropped to 72.07 US cents at 8am in Wellington from 72.86 cents yesterday. The trade-weighted index declined to 76.83 from 77.43.

Clinton pulled out into the lead in the US presidential election with the CNN/ORC poll giving her a five point advantage over rival Donald Trump at 47 per cent.

The Dollar Index, a measure of the greenback against a basket of currencies, gained 0.5 per cent with traders picking she would be a safer pair of hands for the US economy.

US Federal Reserve officials also gave upbeat assessments on the economy, stoking expectations for a rate hike in December.

A drop in prices at the latest GlobalDairyTrade auction also weighed on the kiwi, with the GDT price index down 3 per cent to US$2,880, and whole milk powder prices falling 3.8 per cent to US$2,681 a tonne.

"The USD has made a firm start to Q4 as optimism over a Clinton victory and growing confidence that US economic activity may accelerate helps to support the currency," ANZ Bank New Zealand agri-economist Con Williams said in a note.

"A higher USD and softer dairy auction was enough to push the NZD/USD back to the bottom of recent ranges."

The kiwi slipped to 56.60 British pence from 56.82 pence yesterday, when it reached the highest level in decades on fears UK Prime Minister Theresa May's exit from the European Union and focus on curbing immigration would cut the country out of the single market. The local currency declined to 64.32 euro cents from 65.08 cents.

Local data today includes Auckland house price figures and commodity price data.

The kiwi dropped to 4.8060 Chinese yuan from 4.8600 yuan yesterday and fell to 74.05 yen from 74.52 yen. It declined to 94.53 Australian cents from 95.07 cents yesterday.