AUD/NZD Rises Sharply

The AUD/NZD pair rose sharply in the early pre-opening European hours as New Zealand shunned the incumbent National Party in favor of a coalition government with the Labour Party. This rose fears over central bank policy and long term growth.

The New Zealand dollar is down against all other currencies. NZD/USD is down 1.8%, NZD/CHF is down 2.35%, NZD/JPY also above 2% down.

AUD/NZD is trading some 250 pips higher today, rising with 2.31%. The initial reaction is still not over as the pair is still getting sold all over the market. However, the volumes have been decreasing which indicates that the selling wave is coming to an end. A corrective wave might be expected that will bring some stabilizing to the New Zealand dollar.

Chart: AUD/NZD H4