NZD remains under pressure - BBH

New Zealand dollar remains under pressure and has only posted one advancing session since October 13 as the driver here is the new government, according to analysts at BBH.  

Key Quotes

“We have just completed an unusual 12-month period in which all the G5 countries held national elections, and there has generally been a shift to the right.  New Zealand appears to have shifted to the left with a Labour-led government.  It will seek to hike the minimum wage and change the central bank's mandate to include, as the US does, a full employment goal, alongside price stability.”  

“However, the significance of these measures for global investors does not seem particularly salient, though some object to what they see is a return to demand management.  We suspect such ideological considerations will lead to an overshoot.  While we monitor prices for a reversal pattern, we see it moving toward the lower end of this year's range (~$0.6800-$0.6845), with a break signaling $0.6675.”  

“We note that both the Nikkei and the New Zealand stock market snapped a rally today with modest losses.  The NZX 50 fell less than 0.1% to snap a 15-session advance that began on October 3.  The Nikkei broke a 16-session rally with nearly a 0.5% pullback.  The MSCI Asia Pacific Index was off fractionally for the second session and for the sixth time in the past seven sessions.”