Nervousness Ahead of New Government Formation Sends Kiwi To Nearly-five-month Lows
New Zealand dollar tumbled broadly against its major rivals on Thursday as market participants were waiting for the country’s announcement on the new government following an inconclusive election on September 23rd.
The Kiwi plunged by more than 1.2 percent to trade at $0.7065 in Asian trading session, sending the pair NZDUSD to the weakest level since May 30th. The local currency was hit hard after New Zealand First leader Winston Peters on Thursday said he would support the Labour Party to form government for the first time in nine years.
With the backing of the New Zealand First Party and the Green Party, the new government led by Jacinda Ardern will control 63 of the 120 seats in parliament. The Labour party only win 46 seats in the election last month. The Kiwi dropped amidst concerns that policy changes may cause the economy to lose growth momentum.
Sell Stop at 0.70600, Take profit at 0.70150, Stop loss at 0.70800