Talking Points:

  • New Zealand’s Prime Minister John Key announced his resignation
  • He said he could not serve another term and wouldn’t fight next year’s general election
  • The New Zealand Dollar retreated as surprised markets pulled out

The New Zealand Dollar took a surprise knock on Monday after the unexpected resignation of the country’s Prime Minister, John Key.

Mr. Key has been in office for eight years but announced that he will now step down. Local press reports that he is quitting for personal reasons, with some suggesting that he has done so at the request of his wife.

He has also said that he would not serve another term as Prime Minister, and would not fight next year’s general election.

Key called the decision, “the hardest I have ever made,” and said he did not know what he would do next.

Deputy Prime Minster Bill English is expected to take over until the governing National Party holds a caucus to choose a new Prime Minister on December 12.

NZS/USD slipped to 0.70819 after the data, from 0.71400 before the news hit the wires.

Shock result. The kiwi slips back:

New Zealand Dollar Clobbered as PM Key Steps Down

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--- Written by David Cottle, DailyFX Research