By Paul McBeth
Nov 7 (BusinessDesk) - The New Zealand dollar fell in local trading as a tight US Presidential race undermined investor confidence and after new Reserve Bank governor Graeme Wheeler said the currency was still too strong.
The kiwi fell to 82.65 US cents at 5pm in Wellington from 82.84 cents at 8am and 82.61 cents yesterday. The trade-weighted index declined to 73.80 from 73.94.
Incumbent President Barack Obama took the lead over Republican rival Mitt Romney in the electoral college vote, with 225-186 after trailing in early projections, according to Bloomberg. The first to 270 votes in the electoral college wins the presidency, and Obama was leading in several key swing states that are often seen as deciding the ultimate winner. Romney was leading the popular vote with 50 percent to Obama's 48 percent.
"People are watching the election and it's a bit of a risk-off theme," said Tim Kelleher, head of institutional FX sales at ASB Institutional in Auckland. "If Obama gets it, it should be positive for the kiwi, if Romney wins it'll probably be a slight negative."
Reserve Bank governor Wheeler said the currency was still too strong at today's six-monthly financial stability report, though he dismissed suggestions it could be reined in by cutting interest rates and indicated he will talk about it at the December monetary policy statement.
"That put a little doubt in people's minds," Kelleher said. The kiwi may trade in a range of between 82.50 US cents and 82.75 cents, he said.
Prices of dairy products rose 1.1 percent in Fonterra’s latest GlobalDairyTrade auction, the second straight gain on the sales platform.
Investors will be looking at New Zealand's third-quarter employment figures tomorrow, which are expected to show the unemployment rate fell to 6.7 percent.
The kiwi dollar fell to 79.11 Australian cents from 79.23 cents, after the Reserve Bank of Australia yesterday held the target cash rate at 3.5 percent, quashing expectations of a quarter-point cut and holding the interest rate gap in favour of Australia.
The New Zealand dollar fell to 64.36 euro cents from 64.56 cents yesterday and was little changed at 51.60 British pence from 51.69 pence. It slipped to 66.09 yen from 66.17 yen yesterday.