The kiwi’s early gain looks more like a thin-liquidity Monday open than a verdict on the election. The result won’t be settled until the final count on November 27, and coalition talks could run for weeks after that. A prolonged hung outcome would keep a layer of political risk on the currency. The loss of Finance Minister Nicola Willis’s seat adds uncertainty over fiscal direction in a second term. Until the count firms up, global risk sentiment, US dollar moves and RBNZ expectations are likely to matter more for NZD/USD than the election itself.
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The kiwi opened the week firmer, but with Luxon’s coalition clinging to a wafer-thin majority and 400,000 votes still uncounted, New Zealand’s election has produced a wait-and-see market rather than a verdict.
Summary:
NZD/USD rose around 0.5% in very early Asian trade on Monday, the first session since Saturday’s election.
Preliminary results give the National-led coalition 67 of 131 seats, against a projected 57 for the Labour, Greens and Te Pāti Māori bloc.
Nearly 400,000 special votes are yet to be counted. Final results are due November 27, and coalition talks could take weeks after that.
National’s vote share fell to around 29% from about 38% in 2023, while ACT and New Zealand First gained ground.
Finance Minister Nicola Willis was among the senior National lawmakers who lost their seats.
The centrist Opportunity Party won nearly 6% and could become kingmaker if the coalition falls short.
The New Zealand dollar edged around 0.5% higher against the US dollar in very early Asian trade on Monday. It was the first session since a knife-edge general election that has left the country facing weeks of political uncertainty.
Preliminary results from Saturday’s vote give Prime Minister Christopher Luxon’s National-led coalition a paper-thin majority, with 67 seats in an expanded 131-seat parliament. The margin is so narrow that a small shift in the final count could still open a path to power for the left-leaning opposition bloc of Labour, the Greens and Te Pāti Māori, which is projected to hold 57 seats. Nearly 400,000 special votes, including those cast by New Zealanders overseas, are yet to be counted.
Luxon told supporters in Auckland that his party appeared to have a pathway to government but that the race was too close to call. Final official results from the Electoral Commission are due on November 27, and coalition negotiations could take weeks after that. Labour leader Chris Hipkins did not concede, insisting that every vote must be counted.
The result points to deep voter frustration over fuel prices and other living costs, stubbornly high unemployment and healthcare. The government’s economic agenda has been complicated by US tariff uncertainty and the surge in fuel prices driven by the war with Iran. National’s share of the vote fell to around 29% from about 38% in 2023. Its partners ACT and New Zealand First lifted their shares to roughly 11% and 10%, strengthening their hand in any coalition talks and raising the prospect of a government that tilts further to the right.
For markets, one notable casualty is Finance Minister Nicola Willis, who lost her seat along with several other senior National lawmakers. That leaves questions over who would steer fiscal policy in a second term.
The centrist Opportunity Party, led by political newcomer Qiulae Wong, is projected to enter parliament with nearly 6% of the vote, the first outsider party to do so in three decades. Luxon had ruled out working with the party before the election, but he struck a more conciliatory tone on Sunday. Should the coalition fall short once special votes are counted, Opportunity could find itself as kingmaker, courted by both blocs.
Until the final count, the election outcome is likely to remain a background source of uncertainty for the kiwi rather than a clear directional driver.
This article was written by Eamonn Sheridan at investinglive.com.
