FX.co ★ New Zealand Dollar Rises as Incumbent Party Gains Election Edge

The New Zealand dollar climbed to $0.556 on Monday, rebounding from a more than one-year low hit on Friday, after preliminary election results strengthened the incumbent National Party’s prospects of remaining in power. Prime Minister Christopher Luxon’s centre-right National Party secured 42 seats, while the opposition Labour Party won 36.

Neither party achieved an outright majority. However, National, together with its current coalition partners ACT and New Zealand First, could secure enough seats to govern if a new coalition agreement is reached. The increased likelihood of the existing coalition staying in office lent support to the kiwi, easing market concerns about a possible Labour-led government and its stated intention to reinstate the Reserve Bank of New Zealand’s dual mandate.

Nonetheless, the final outcome remains uncertain, as official election results are not expected until November 27.