The outcome of the election has hastened the expected move of the New Zealand dollar below US70c.

BNZ currency strategist Jason Wong believes the dollar looks oversold against the backdrop of very high-risk appetite and the supportive global backdrop.

"Domestic political forces have not been kind to the New Zealand dollar as the Labour-led Government is seen to be as not as market-friendly compared to the previous administration.

"A broad outline of change in economic direction has been provided, but there remains much uncertainty about the policy outlook.''

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The detail was eagerly awaited, he said.

The kiwi fell to US68.36c early yesterday from US68.88c late Thursday and rose to 58.69c from 58.24c. The trade-weighted index sank to 72.66, an 18-month low.

Wong said the BNZ working assumption was the market had overreacted as currencies were apt to do. Until the policy detail was released, some sort of political risk premium would be built into the dollar.

The BNZ short-term fair value model estimate remained close to US73c, supported by high levels of risk appetite.

However, recent falls in dairy prices and an outlook noting further reduction - particularly for fats and skim milk - would limit any possible recovery in the dollar, alongside the mood around the domestic policy agenda, Mr Wong said.

With changes to the Reserve Bank Act mooted, the market had made a judgement monetary policy would be slower than previously expected in reacting to rising inflationary pressure.

"We disagree with that assessment. The look of the new Government's policies add to inflation risks ahead and support our view of tighter policy from the second half of next year.''

The latest price of the dollar suggested the market had already priced in a lot of negative news for the dollar which should limit further downside risks from here, he said.

Exporters should not be shy in using the current dip to add to hedging cover, Mr Wong said.

The ASB Commodities Weekly reported the weak dollar was providing an election silver lining to New Zealand exporters and New Zealand commodity prices.

Senior rural economist Nathan Penny said the dollar had fallen about 4% since before the election on both a US dollar and TWI basis.

The fall trumped the dip at the two dairy auctions since the election.

From here, and as the Government's policies and their implications became clearer, the New Zealand dollar might regain some lost ground. As a result, some of the commodity price gains might not last, he said.