Never miss a story from Daniel Dubrovsky

Subscribe to recieve updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Daniel Dubrovsky

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Talking Points:

  • New Zealand’s Labour and First party signed a coalition agreement, it is now official
  • The New Zealand Dollar first rallied but quickly turned lower against its major peers
  • Labour is to review and reform the Reserve Bank Act and push minimum wage laws

Just started trading NZD/USD? See our beginner guides to help build your strategy!

The New Zealand Dollar initially rallied against its major counterparts before quickly turning lower as the coalition agreement between New Zealand Labour and NZ First Parties was signed. Jacinda Ardern, Labour’s leader, presented a speech and said that they will prioritize regional economic development. She added that a significant increase in the minimum wage is ahead and promised to be fiscally responsible.

The Kiwi Dollar rallied at first. Prospects of fiscal stimulus, via wage increases, can help boost the economy by increasing consumer spending all else being equal. That may in turn boost inflation and cause the Reserve Bank of New Zealand to fight back by raising rates. However, Jacinda Ardern had more to say.

She reminded us that the new government will “review and reform” the Reserve Bank Act. According to Currency Analyst David Song, a material change in the decision making process is likely to sap the appeal of the New Zealand Dollar. That is what appears to have happened.

NZ Dollar Falls as Labour RBNZ Reform Vow Saps Appeal