The New Zealand dollar strengthened against the Australian currency, after the weekend's inconclusive election result across the Tasman, then drifted back.The Australian dollar slid on political uncertainty after neither of the major parties won a majorit
The New Zealand dollar strengthened against the Australian currency, after the weekend's inconclusive election result across the Tasman, then drifted back.
The Australian dollar slid on political uncertainty after neither of the major parties won a majority in Saturday's election but recovered as markets speculated that a minority conservative government will ultimately be formed.
"In the short-term the Australian dollar may struggle to get any upward traction but in reality both political parties in Australia have very similar agendas so the real influences are external – not internal," Rankin Treasury said.
After dropping to around 79Ac on Saturday morning, the NZ dollar shot up to 79.59Ac at 8am and then drifted lower.
By 5pm it was 79.21Ac from A79.18c at 5pm on Friday.
The Australian dollar was buying 89.13USc at 5pm, up from 88.94USc at the same time on Friday.
Imre Speizer, senior currency strategist at Westpac, said the Australian dollar was punished early today after the election failed to deliver a clear result.
The NZ dollar was 70.65USc at 5pm from 70.45USc at 5pm on Friday.
It dipped against the greenback after the market opened today then slowly recovered for the rest of the session.
The euro hit a more than five-week low near $US1.2660 after European Central Bank Governing Council member Axel Weber said it should extend its loose monetary stance, raising fears of more economic weakness ahead in the euro zone.
Investors also dumped stocks and commodities and piled into US Treasuries in a flight to quality on worries that a US slowdown beginning in the second quarter this year risks dragging the global economy into a renewed slump.
The NZ dollar was up to €0.5554 at 5pm from €0.5502 on Friday, and was up to ¥60.29 from ¥60.06.
The trade weighted index was 66.23 at 5pm today from 65.95 on Friday.
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