New Zealand Dollar Jumps after Keys Wins Election

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New Zealand Dollar Jumps after Keys Wins ElectionThe New Zealand dollar rose after Prime Minister John Key won the election as his National Party promised to reduce taxes and remove barriers to enterprise.

The kiwi rose 0.3 percent to trade at 81.52 U.S. cents as of 8:22 a.m. in Wellington after ending the day at 81.32 cents on Sept. 19. It fell 0.3 percent in the week through Friday last week, its fifth straight weekly drop, its longest decline since May 2007.

The National Party clinched 48 percent of the total votes cast in the Saturday poll, the first time a political party has won majority seats in the nation’s parliament since 1996 when proportional representation was introduced. The rival opposition Labour Party was handed its heaviest defeat since 1922.

National recorded its biggest share of the votes since 1951, compared with 25 percent and 10 percent for the Labour and the Green Party respectively.

The kiwi has jumped at least 4 percent in the past three years due to strong economic growth and after the Reserve Bank of New Zealand increased interest rates this year.

“Key’s win will be a relief to offshore investors,” James Lindsay, an Auckland-based senior portfolio manager at Nikko Asset Management Co. Ltd., told Bloomberg News. “The policies of Labour and the Greens were seen as anti-investment, so we’ll see a wee bit of a relief rally.”

Mr. Key’s finance minister Bill English said that National’s goal from now on is to strengthen business sentiment and boost investment in New Zealand, where unemployment rate is at its lowest in five years. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com