The New Zealand dollar was little changed versus the greenback and the Australian dollar ahead of the 1News Colmar Brunton poll tomorrow after jumping late yesterday when the Newshub-Reid Research poll showed National back in the lead.
The kiwi dollar was trading at 72.87 US cents as at 5pm in Wellington from 72.88 cents at the start of the day and 72.27 cents before the poll was released yesterday. The kiwi traded at 90.80 Australian cents from 90.24 cents before the poll yesterday.
Tomorrow evening's Colmar Brunton poll will be keenly watched because it was the same poll last week that surprised markets by putting Labour ahead on 43 percent to National's 39 percent. Yesterday's Reid Research poll reversed the rankings, putting National on 47.3 percent to Labour's 37.8 percent. The New Zealand dollar has fallen about 5 percent against the Australian dollar since Jacinda Adern replaced Andrew Little as Labour leader on Aug. 1 although traders say the cross-rate had already found strong support at around 89.70 Australian cents from exporters and market participants exiting short positions on the cross rate (ie betting the Aussie would rise vs the kiwi).
"We've travelled a long way down on this cross (rate) only for political reasons and there's a point where enough's enough," said Martin Rudings, a senior dealer at OMF. "Orders were absorbing the trades and then we had a poll with National ahead and boom. There's a chance we've put a bottom in place in the short term," he said referring to the lows the kiwi got to against the Aussie before rebounding.
He said tomorrow's poll may show National regained ground from Labour in the past week. "National has done some hard work" since last week's poll in terms of campaigning, which is likely to be reflected in the next poll as well, Rudings said, adding the qualification that polls can be "a little bit flakey and we're not at the election yet."
The trade-weighted index rose to 75.78 from 75.24.
National's strong showing in the Reid Research poll would translate into 61 seats in the 120-seat parliament, meaning it could govern alone, while Labour may have to rely on the weakened Greens.
The kiwi didn't move much today after figures showed the food price index rose 0.2 percent seasonally adjusted in August as butter hit a record high of $5.39 per block, up 11 percent in the month and 62 percent from a year earlier. It also didn't move much against the Aussie after Westpac-Melbourne Institute consumer sentiment index rose 2.5 percent this month.
The kiwi rose to 80.26 yen from 79.01 yen yesterday. It gained to 60.81 euro cents from 60.43 cents and rose to 4.7543 yuan from 4.7272 yuan. It traded at 54.76 British pence from 54.83 pence.
The two-year swap rate rose 1 basis point to 2.15 percent while 10-year swaps rose 4 basis points to 3.10 percent.
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