The Kiwi Dollar fell sharply on Thursday after it was announced that 37-year-old Jacinda Arden would become Prime Minister of New Zealand thanks to a coalition with New Zealand First Party that saw her offered the top job over Nationals Leader Bill English. Arden becomes the youngest and now 3rd female Prime Minister of New Zealand and will lead a Labour Government across the Tasman. The news shocked financial markets and sent the Kiwi Dollar 1.5c lower or 150 ticks in the following 8 hours. The reason why the Kiwi Dollar was sold off so sharply is simply that such a surprise creates initial political instability. Will Arden’s Labour government be viewed by the market as a positive or negative? The coming days and weeks ahead will be important.
The Pound vs the Aussie Dollar took a nosedive on Thursday after stronger than expected September unemployment figures for Australia were released and weaker than expected retail sales in the UK. The official unemployment rate dropped to 5.5% with 19,800 local jobs created which beat the market’s estimates of 15,000. UK Retail Sales were well down on what leading economists expected growing by only 1.6% vs the 2.2% expected and 2.6% the previous month. The Pound vs Aussie Dollar is flirting with a new change in trend direction according to our Daily Trading Plan with the price needing to close a daily candle below 1.6692 for a new trend direction to confirm.
The Euro rallied Thursday after Spain’s Catalonia regional government said it would suspend autonomy plans after the Prime Minister of Spain threatened to dissolve Catalonia’s regional government after a referendum for independence earlier in the month was considered unconstitutional.
US Government yields pulled back a little in the US trading session, which weighed on the US Dollar and helped the Euro higher. The 26th of October is a key day for the Euro as this is when the ECB will announce its plans to reduce its stimulus program and traders want to know how much the will reduce it by and when it will start and finish.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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