NZ dollar making gains

(Newshub.)
(Newshub.)

The New Zealand dollar has surged to just over 54 British pence.

You have to go back to May 10th 2013 to find the last time the Kiwi was trading at a higher level than that against the Pound.

That means the New Zealand dollar gained around 3.7 percent last week against the British currency.

The Kiwi is trading at 71.80 US cents.

It has risen over half a percent to 96.16 Australian cents, following the weekend's uncertain election outcome.

The focus of the local markets will be on Australia following the election. The outcome of the election is unclear, with the counting set to resume today.

Analysts do not expect there will be a repeat of the sell-off that followed the Brexit vote.

Craigs Investment Partners says the most likely outcome will be that either Prime Minister Malcolm Turnbull's Coalition will gain the required 76 seats, or there will be a hung parliament.

"Regardless of the result, we expect the election to have a relatively limited impact on equity markets or monetary policy expectations. However, the uncertainty and lack of clear leadership won't do wonders for business sentiment."

Craigs also points out that the returns from global shares have not been as bad as you might think.

One factor weighing on investors' minds is that Australia's triple-A credit rating could be downgraded.

Australia's Reserve Bank reviews rates tomorrow. But the expectation is that it will keep its cash rate on hold at 1.75 percent rather than cutting again.

That leaves it room to potentially cut in August.

Newshub.

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