What on earth is the connection between Kim Dotcom – one of the world's biggest internet pirates – and the New Zealand dollar, you ask?
Dotcom, who is fighting extradition to the United States on piracy charges, launched a political party earlier this year to contest New Zealand's general elections on September 30.
In late-May, his Internet Party entered an alliance with the Mana Party, a small party that advocates for the nation's indigenous Maori, to improve his chances of gaining political clout.
Their joint party, Internet Mana, is gaining popularity among young voters and is in striking distance of the five percent threshold needed to guarantee representation in parliament, according to the One News-Colmar Brunton poll published on August 17.
"Fears that the infamous web entrepreneur Kim Dotcom may be starting to influence the New Zealand election is affecting the currency. Mr. Dotcom's party has aligned itself with the Maori party and is polling at 5 percentage points – a big enough swing in New Zealand politics that could possibly give the ruling majority to the opposition Labour party," Boris Schlossberg, Managing Director of FX Strategy at BK Asset Management wrote in a note.
"Such a move leftward would no doubt shake up the currency markets which have been caught by surprise expecting yet another win by the National party that would maintain the economic status quo," he said.
A challenge for the incumbents
The National Party-led coalition - headed by Prime Minister John Key and Deputy and Finance Minister Bill English - is lauded for its success in steering the country through the global financial crisis and aftermath of the devastating Christchurch earthquake of 2011.
A government led by the main opposition Labor party is viewed as unfavorable by investors.