The New Zealand dollar was the biggest loser among G10 currencies, dropping as much as half a percent after central bank officials again hinted that negative interest rates are possible. It recovered in early deals in London to trade 0.1% higher to the US dollar on the day. Money-market pricing of an April 2021 rate cut increased and the kiwi slipped to a three-week low against the Aussie, before paring some of the losses.
More volatility is expected in the next couple of weeks as elections are being held on Oct. 17. Prime minister Jacinda Ardern’s left-leaning Labour Party is expected to win comfortably, despite a slumping economy and her failure to deliver on key pledges such as fixing a housing crisis and lifting children out of poverty following a world-leading response to the Covid-19 pandemic. The next resistance level is at 1.0935.