The New Zealand dollar fell to a four-month low against the pound after the Bank of England said it may hike interest rates in coming months and declined against the greenback as the latest political poll put the Labour Party back on top.
The kiwi dollar dropped to 53.82 British pence as at 8am in Wellington and earlier touched 53.64 pence, the lowest since late May, from 54.87 pence late yesterday. It fell to 72.11 US cents from 72.54 cents.
The pound surged 1.4 per cent against the greenback after the BoE kept its bank rate unchanged at 0.25 per cent but said it may be appropriate to reduce some monetary stimulus in the "coming months". The overnight interest swaps market is putting odds on a hike at the bank's November meeting.
In the US, CPI inflation was a stronger-than-expected 0.4 per cent in August, stoking talk of a third rate hike by the Federal Reserve this year. The kiwi initially dipped after 1News Colmar-Brunton poll put Labour on 44 per cent support to National's 40 per cent, while a poll of polls had them level pegging.
The pound "surged after a more hawkish than expected BoE announcement," said Jason Wong, a currency strategist at Bank of New Zealand.