The New Zealand dollar jumped by three-quarters of a percent against many of the majors on Wednesday evening after the latest election poll showed a clear swing in public opinion back towards the incumbent National Party. New Zealand’s general election will take place in three days’ time, on Saturday September 23rd.
NZD/USD is now seen at a six-week high close to 0.7315 and NZD/AUD at a four-week high of 0.918.
The 1 News Colmar Brunton poll – in which 1,006 eligible voters were interviewed between September 16th and September 19th – now has the National Party at 46%, up from 40%, and the opposition Labour Party at 37%, from 44%.
When asked for their preferred Prime Minister, 37% of interviewees gave National leader Bill English as their answer and only 31% said their preference was for Labour’s Jacinda Ardern. In the previous 1 News poll, the share of the vote for English and Arden had been 32% and 34% respectively.
The results display a significant change in momentum before the election. The Labour Party had achieved a remarkable turnaround in August after Jacinda Ardern replaced Andrew Little as party leader at the start of the month. Polls released on September 11th suggested that Labour had, in fact, moved ahead.
Earlier in the year, under Little’s leadership, Labour support had been in the mid-20s and the party was given no chance of toppling the Nationals, who are targeting a fourth term in government.
Financial markets generally take a “better the devil you know” attitude when it comes to national elections, with traders typically favouring the incumbents.
Yen Fails to Make the Most of Impressive Export Data
In other financial news on Wednesday, Japan released data showing export growth running at its highest level since 2013. Annual growth of 18.1% comfortably beat July’s annualized rate of 13.4% and the market forecast of 14.5%.
Import data also surged (growth of 15.2% versus a forecast of +11.5%), indicating that domestic demand in Japan is improving.
To the disappointment of FX traders, today’s data did little for the yen. Seven hours after the release, the currency is little changed on its pre-data levels against the US dollar and euro. When last seen, the dollar and euro were buying 111.52 and 133.85 yen respectively.
The Bank of Japan is not expected to hike interest rates at its meeting on Thursday; not with inflation (+0.4%) still so far below the bank’s 2% target.
Interest rates in Japan are currently negative, at -0.1%, and haven’t been changed since they were dropped from 0% in January 2016.