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NZ dollar dips as Clinton firms in polls

NZ NewswireNZ Newswire 10/10/2016 Paul McBeth

The New Zealand dollar fell to a two-month low as investors see a likely win by Democrat candidate Hillary Clinton in the US presidential campaign as paving the way for higher interest rates.

The kiwi fell as low as 71.07 US cents, trading at 71.26 cents at 8am from 71.53 cents. The trade-weighted index edged down to 76.29 from 76.47.

The Dollar Index, a measure of the greenback against a basket of currencies, rose 0.3 per cent after the presidential debate. While Republican nominee Donald Trump delivered a stronger performance, the taint to his brand from reports of his attitudes to women has seen his support dwindle in public polls and from within his own party.

If Mrs Clinton was to secure victory on November 8, that's seen as supportive to the economy and would likely free up the Federal Reserve to raise the federal funds rate in December.

"While Mr Trump's performance was seen to be improved from the first debate, the general view is that the damage to his brand from fresh media reports over the weekend is now irreparable," BNZ's Jason Wong said. "A Clinton victory would ease the way for the Fed to hike again in December, avoiding a possible risk-off move under the alternative scenario."

The kiwi fell to 93.72 Australian cents from 94.18 cents after Russian president Vladimir Putin said his country would join the Organisation of the Petroleum Exporting Countries in freezing prices or cutting production. That bolstered commodity-sensitive currencies, benefiting the Australian dollar more than the kiwi due to Australia's exposure to hard commodities.

The local currency dropped to 4.7799 Chinese yuan from 4.7925 yuan, rose to 73.88 yen from 73.57 yen, was little changed at 57.70 British pence from 57.69 pence and traded at 63.99 euro cents from 63.92 cents.

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