NZD: Politics weighing but 200-dma to offer support - ING

Analysts at ING note that the post-election political uncertainty continues - with New Zealand no closer to forming a working government.

Key Quotes

“NZ First's Winston Peters is still refusing to make a decision on which party he would like to form a coalition with (National or Labour) until the full votes have been counted on 7 Oct. This will continue to serve as a near-term headwind, though the NZD/USD fallout has been contained to the 0.71-0.72 area. This suggests markets are still hoping for a National-NZ First coalition.”

“After an event-filled week, the domestic calendar is very light. Strong fundamentals (terms of trade) should act as a buffer to the kiwi amid the prevailing uncertain political backdrop. We look for the 0.7150 (200-dma) to provide support.”