I thought I'd pass along this view from TD on the NZD factors for the week ahead in NZ

On the Q2 data due next week:

  • Big week for old data with a likely narrower current account deficit and strong Q2 GDP print. Unless they are wildly out compared with consensus the General election on the weekend will take central stage.
  • With the outcome now too close to call, the NZ election should take centre stage next week, with Q2 GDP playing second fiddle. Nonetheless, an outcome above the RBNZ +0.9%/qtr forecast and closer in line with TD's +1.2% should raise more questions on whether the RBNZ should be more hawkish.

On the Reserve Bank of New Zealand outlook:

  • The market is hardly budging. Feb is at 10%, Mar 14% and May 30% for a 25bps RBNZ hike.

On the election:

  • NZD Election polling having a much larger impact on the currency. High US$0.7320, lows near US$0.72.
  • RBNZ hike probabilities hardly budged, but polling results provided a fair amount of intraday NZD volatility with the market see-sawing between the National and Labour party taking the lead.

(bolding mine)

Yep, election polls will be a big driver, but as TD point out, it is not the only thing to watch in the week coming up. Take extra care, politics can confound the other factors and can also be more volatile - risk in the NZD will be elevated.

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