The New Zealand dollar continued to come under pressure from volatile world markets yesterday, with today's election acting as a wild card.
There was steady selling in the kiwi on Thursday night and at 9am it was trading at US46.58c, off a low of US46.46c but stronger than this week's 11-week low of US46.25c. It closed last night at US46.85c.
The aussie dollar softened overnight to US54.15c (compared with Thursday's close of US54.23c).
Dealers said they were going short on the kiwi as the election drew closer.
"The offshore investor market really hasn't taken too much notice of the election coming up, but it's going to become a big issue on Monday," one Wellington dealer said.
With the possibility of a minority Labour-led coalition government becoming more likely, "no one likes uncertainty, so we may see come tonight or Monday morning...the kiwi will suffer on the back of that".
Support levels around US46.20c could weaken and the kiwi-aussie cross -- which only two days ago had peaked for at A88.10c -- was now at A86.03c this morning (A86.31c).
Concerns about global growth and high-risk aversion were also continuing to weigh on the kiwi, and it could move down as far as US45.50 in coming sessions, BNZ currency strategist Stu Ritson said.
The kiwi expected to trade in between US46.25/75c today.
On other crosses, the kiwi was buying 54.23 yen (54.47), 29.41 pence (29.71), 0.6704 Swiss francs (0.6796) and 0.4637 euro (0.4687).
The aussie was buying $NZ1.1631 ($NZ1.1583).
On the money market, 90-day bills were at 5.97 per cent (5.98), the trade-weighted index was at 52.74 (53.07) and the monetary conditions index was at minus 500 (minus 469).
On the debt market, the April 2004 bonds were at 5.55 per cent (5.59), the November 2006 bonds were at 6.17 per cent (6.21), and the November 2011 bonds were at 6.40 per cent (6.45).
- NZPA
<i>Currency:</i> Kiwi comes under pressure as election draws near
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