The New Zealand Dollar, familiarly known as the Kiwi, was the G10 currency market’s biggest mover today and struck a fresh 5-month trough against the US Dollar. That low came in the wake of the incoming government’s outline of its anticipated policy changes which many investors view as unfriendly toward foreign investment given a ban on foreigners purchasing local properties and reducing immigration. What is of greater concern is a proposal to perhaps review the Reserve Bank of New Zealand’s mandate to follow that of the US Federal Reserve Bank, i.e. a dual mandate of full employment and price stability.
As reported at 10:51 am (BST) in London, the NZD/USD was trading at $0.6927, down 0.66%; the pair had earlier hit a trough of $0.68852 while the peak is a distance $0.70044. The EUR/NZD is up and trading at N$1.6975, a gain of 0.79%, while the NZD/JPY is trading at 78.762 Japanese Yen, down 0.48%.
Change Not Unexpected
Currency strategists say that these proposals by New Zealand’s Labour Party should not have come as any surprise given that it was well telegraphed during the campaign. Nonetheless, it is creating a great deal of uncertainty in regard to the independence of the New Zealand Reserve Bank.