WELLINGTON, Sept 26 (Reuters) - The leader of New Zealand's opposition Labour Party said on Tuesday she has reached out to the party holding the balance of power after an indecisive weekend election, with the two parties sharing "a lot of common ground".
The ruling National Party won the most seats in Saturday's general election, but failed to secure enough to form a government, leaving the nationalist New Zealand First Party in the position of kingmaker.
NZ First leader Winston Peters, a veteran politician who has served in both National and Labour governments in previous coalitions, is yet to speak directly with either Labour leader Jacinda Ardern or Prime Minister Bill English.
English has said it could take weeks to form a coalition government, with uncertainty weighing on the New Zealand dollar. The kiwi, the world's 11th most traded currency, fell 1 percent on Monday, its biggest daily drop in over four months, and was steady at $0.7255 on Tuesday.
The National Party secured 58 seats ahead of the 52 seats for the Green Party and Labour, which experienced a surge in popularity under new leader Ardern, in the weekend poll. That left both still needing NZ First's nine seats to reach the 61 seats required to form a government under the country's proportional representation political system.
Ardern said her team had made contact with Peters' team, saying they were ready to talk when he is, and maintained that she had "absolutely every chance" of becoming New Zealand's youngest prime minister in modern history.
"There has been a mandate in the form of enough people, a majority, voting against the status quo, so that's why we continue to pursue that in talks," the 37-year-old told the 1 News Breakfast television program.
While both National and Labour are expected to adhere to fiscal prudence, they will likely differ on monetary policy, trade and immigration.
Some are worried that Labour's plans to cut migration and renegotiate some trade policies will hurt two key sources of growth for New Zealand's small, open economy.
There is also some concern about what NZ First will demand in return for its support. Peters has lobbied for more currency intervention by the central bank, which would weigh on the kiwi.
A final tally of the election results is due on Oct. 7, when "special votes", which make up 15 percent of the total and which include overseas votes, are released. English remains prime minister in the interim.
