NZ dollar jumps

Australian and NZ DollarsThe New Zealand dollar jumped and has held onto its gains after the latest opinion poll showed the National Party back in the election race lead and with the numbers to govern alone.

The kiwi was trading at US72.88 cents as at 0800 on Wednesday in Wellington from US72.27c before the poll was released on Tuesday. The trade-weighted index rose to 75.87 from 75.24.

The Newshub-Reid Research poll showed support for National rose 4 percentage points to 47.3 per cent while Labour fell 1.6 points to 37.8 per cent. The Greens fell below the 5 per cent threshold to sit at 4.9 per cent. National’s support would translate into 61 seats in the 120-seat parliament.

Traders said the kiwi would have extended its gains if not for a resurgent US dollar.

“It was a classic case of expecting one thing, but the opposite playing out, with the market wrongly positioned into the latest political poll,” said ANZ senior economist Sharon Zollner.

“But it clearly highlights where the market’s attention will be over the coming couple of weeks, and speaks of whippy price action – despite the poll, the election remains anyone’s guess.”

Improving sentiment for the greenback, which has been helped by a pickup in risk sentiment, “should at least keep top-side moves limited near-term” for the kiwi, Zollner said.

On Wednesday, the only local data of significance is food prices for August while across the Tasman, the Westpac Banking Corp consumer confidence survey for September is due.

On Wednesday morning, the kiwi rose to 90.85 Australian cents from A90.24c and lifted to 80.30 yen from 79.01 yen. It gained to 60.90 euro cents from 60.43c and rose to 4.7628 yuan from 4.7272 yuan. It traded at 54.88 British pence from 54.83p.

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