19 Sep 2014

Dollar steady, market higher ahead of vote

6:57 pm on 19 September 2014

The New Zealand currency was little changed against the US dollar ahead of tomorrow's general election, while the sharemarket ended the trading week higher.

Westpac currency strategist Imre Speizer said the US dollar is likely to continue to strenghten against the Kiwi - regardless of which way the vote goes.

markets bull and bear

Photo: PHOTO NZ

"The US dollar has been on an amazing up move since July. It's risen very, very quickly on the back of some good US data ... that is mainly why the Kiwi-US has fallen so much. You may well get a bounce up beyond 82 cents over the next week or two," he said.

"The weekend's election here, I think, will be a big deal potentially. We'll know how the market reacts to that on Monday morning if we get any sort of a clear indication of which bloc is likely to govern.

"The global markets are watching the New Zealand election and we imagine the first hour of trading in New Zealand will be quite interesting."

At 5.20pm today, the dollar was trading at 81.34 US cents, 90.73 Australian cents, 49.32 British pence, 0.6292 euro, 88.82 yen and 4.99 renminbi.

Meanwhile, New Zealand shares rose today, the benchmark Top 50 Index up 27 points to 5181.

A director at Hamilton Hinden Green, Grant Williamson, said tomorrow's vote kept most investors on the sidelines with a less than certain outcome.

"The market has rebounded a little bit today and obviously this is the last trading day before the election (with) very light volume. There is still some uncertainty as to which way the election's going to go over the weekend and it could be some time before we have a result - particularly if it's a very close event.

"There's been a little bit of selling in some of the stocks, but nothing much to take note of. Really, it's just a very flat market. Fletcher Building is certainly proping up the index for the day."

Mr Williamson said Fletcher Building stock will probably do well under either a National or Labour-led government, as both parties have pretty progressive building policies.

Fletcher Building's share price rose 4 cents to $8.82 by the close of trade.