New Zealand Dollar Holds Near 11-Month Low Amid Election Uncertainty

The New Zealand dollar is struggling near an 11-month low, stabilizing around $0.560 after dipping slightly below that level in recent trading. The currency failed to gain much support from positive business confidence data, which showed a net 43% of firms expecting better conditions ahead, up from 8% in the previous quarter. Despite higher fuel prices and ongoing geopolitical risks, business sentiment improved in the third quarter.

However, the kiwi remains under pressure due to a stronger US dollar and rising Treasury yields. Additionally, uncertainty surrounding the upcoming November general election is adding to the challenges facing the currency. Markets are currently pricing in a 58% chance of a 25-basis-point rate hike by the Reserve Bank of New Zealand later this month, with a December move also fully anticipated.