Foreign Exchange / Foreign Currency News
No Party Won over Half in New Zealand Election, Uncertainty Made NZD fell 0.7%
New Zealand had an election on the weekend. Since no party won over 50%, it becomes uncertainty to form the government. The rate of NZD to USD fell 0.7% at a time. Analysts believe NZD would not be stable because they need time to form the government in the next few weeks. NZD against other foreign currency remained stable. Foreign Exchange market volume higher than last week.
According to Bloomberg News, the ruling party National Party got 58 of 120 stands. The major opposition party Labour Party get 45. Both of them didn’t get a half.
Since the possible allies of both major parties lost their stands in the Congress, New Zealand will have a consultation to form the government. The consultation might take weeks. The Prime Minister Bill English announced they won as the major party. In the meanwhile, the leader of Labour Party Jacinda Ardern refused to admit their failure in the election.
The analyst of Invest Dept. in Hong Kong of Credit Agricole, David Forrester, said no matter which party is going to form the government, there would be some challenge awaits. The uncertainty political situation would make some negative impacts on NZD.
Challenges awaits NZ and the Dollar
Due to the concern of politics and bad economic data, New Zealand Dollar exchange to USD fell over 4% in August. It is the worst performing currency among the main currencies. It’s even worse than AUD.
Since 1996 New Zealand started proportional representation, no party ever won the absolute major. The investigation before the election showed if Labour Party take the lead, NZD would fall. On the contrary, if National Party takes the lead, NZD would raise. After the election, NZD exchange to USD has fallen 0.7% to 0.7285. The decreasing slow down on Monday and ended at 0.7277.
For the foreign exchange market, now is not the time to invest New Zealand Dollar.