The New Zealand dollar gained after the incumbent National Party won a convincing election victory on the weekend, instilling confidence in the administration's ability to continue pursuing its policy programme.
The kiwi rose to 81.53 US cents at 5pm in Wellington from 81.49 cents at 8am, and was up from 81.24 cents on Friday in New York. The trade-weighted index advanced to 78.78 from 78.53 last week.
The local currency got a boost from the Saturday general election, which delivered the ruling National Party a bare majority, with 61 seats of the 121-seat Parliament. If that holds after special votes are counted, Prime Minister John Key is still likely to support agreements with the Maori, United Future and Act parties, taking the government's total to 65 seats.
Any further gains in the kiwi may be muted ahead of Fonterra Cooperative Group's annual result on Wednesday, which may see the dairy exporter update its forecast milk payout to farmers and will confirm final payouts for the 2013/14 season.
"If they (Fonterra) comment on the forecast right now, you'd be betting they would be dropping it," said Imre Speizer, market strategist at Westpac Banking Corp in Auckland.