The New Zealand Dollar underperformed in otherwise quiet Asia Pacific trade, hurt by political uncertainty as the ruling National and opposition Labour parties attempt to craft a ruling coalition following an inconclusive general election. Either side could cobble together a Parliamentary majority with the help of the nationalist NZ First grouping. Its leader Winston Peters has until October 12 to pick a side.
The British Pound corrected higher following Friday’s steep drop against the G10 FX majors. That move was driven by worries that infighting within the Conservative government of Theresa May will throw Brexit negotiations off course. The bounce follows weekend news that the Prime Minister might soon reshuffle her cabinet – potentially sacking rebellious Foreign Secretary Boris Johnson – in a bid to reassert control.
From here, a quiet economic data docket in European trading hours and an empty one in the US – where the Columbus Day holiday will probably sap participation despite the markets being open – seems likely to put sentiment trends in control. S&P 500 futures are pointing cautiously higher, hinting that a recovery in risk appetite might be ahead. A weaker Japanese Yen seems like the most obvious result in such a scenario.
Asia Session
European Session
** All times listed in GMT. See the full DailyFX economic calendar here.
