Daily Currency Update

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Election Day

NZD - New Zealand Dollar

The New Zealand dollar enjoyed strong gains overnight as markets position for a Biden/Harris win in the 2020 Presidential Election. The former Vice President maintained a strong lead into election day and while Trump remains close enough in several key swing States, giving him a path to an Electoral College win, pundits and markets appear to be front running a blue wave. The New Zealand dollar advanced 100 points, jumping off intraday lows at 0.6620 to touch session highs at 0.6718 as risk appetite surged on hopes the democrats will deliver an aggressive fiscal relief program.

Attentions today remain squarely affixed to the US election. With record numbers of American’s voting ahead of election day we may need to wait longer than normal for ballots to be counted. We expected risk demand will continue to improve if early results point to a comfortable Biden win, however should Trump pull ahead and secure a swing state early volatility will increase and NZD upside may come under pressure until a clear winner is announced.

Key Movers

The US dollar fell across the board overnight as markets price in a Democrat Election sweep. Investors appear to be front running the election result driving risk appetite on expectations a Biden/Harris White House will deliver big on Fiscal stimulus and repair trade tensions. The dollar index fell half a percent to 93.55 as the Euro bounced off supports to surge back through 1.17. The single currency has come under pressure in recent days as COVID-19 lockdowns extinguished hopes for Q4 economic recovery. Having touched 1.1620 the Euro appeared poised for a break below support but a blue wave and surge in risk demand should ensure a stay of execution as recent safe haven moves that propped up the world's base currency are unwound.

Our attentions remain squarely affixed to the Presidential race with direction solely governed by results as they filter through. A clear Biden win will support further improvements in risk sentiment and likely dampen demand for the USD while a surprise Trump win will ensure a swift correction of overnight moves and heightened volatility.

Expected Ranges

NZD/USD: 0.6580 - 0.6790 ▲

NZD/EUR: 0.5650 - 0.5780 ▲

GBP/NZD: 1.9320 - 1.9680 ▲

NZD/AUD: 0.9305 - 0.9425 ▼

NZD/CAD: 0.8710 - 0.8860 ▲