NZD flying South – SocGen

The main FX mover overnight was the NZD, down as New Zealand First leader Winston Peters backed Labour to form a government, points out Kit Juckes, Research Analyst at Societe Generale.

Key Quotes

“There are details to iron out, but markets will remain nervous about what this means for monetary policy, with Mr Peters favouring a Singapore-style net effective exchange rate target. There’s nothing good for the NZD until clarity returns, and we still like longs in AUD/NZD, and CAD/NZD.”