The New Zealand currency sunk to a fresh four-month low on Monday as a small nationalist party carried out negotiations to determine the country’s next government.

The currency fell to $0.7160, its lowest since early June, from $0.7090 on Friday evening.

New Zealand’s inconclusive election on Sept. 23 has generated intense political uncertainty that has weighed on the Kiwi.

A final vote count on Saturday showed the governing National Party lost some ground to the center-left Labour-Green bloc from a preliminary tally, even though it still held the largest number of seats in parliament.

The populist New Zealand First Party holds the balance of power and started negotiations with both Labour and National on Sunday.

The negotiation talks continued on Monday as the clock counts down to New Zealand First’s self-imposed deadline of Oct. 12 to announce which party it would put in government.
…