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© Reuters. FILE PHOTO: New Zealand Prime Minister Bill English attends an event at a restaurant in Hong Kong© Reuters. FILE PHOTO: New Zealand Prime Minister Bill English attends an event at a restaurant in Hong Kong

By Ana Nicolaci da Costa

WELLINGTON (Reuters) – New Zealand’s ruling National Party reclaimed a slight lead in the latest average of polls, underscoring a tight race that has unsettled investors amid uncertainty over the make-up of the next government and its trade and immigration policies.

The “poll of polls” compiled by Radio New Zealand showed National’s support at 41.3 percent, just ahead of Labour on 40.5 percent, giving National 51 seats in parliament and Labour 50.

Both parties would need to rely on the nationalist New Zealand First Party to form a coalition government under the country’s proportional representation system as the winning party or parties need 61 of parliament’s 120 seats to form government.

The poll average suggests the two main parties are still neck and neck, even as individual polls point to contrasting results, with some giving a lead to Labour and others National.

The uncertain outcome has thrown doubts over future policies on major issues like trade and immigration, both key drivers of New Zealand’s relatively robust economic growth in recent years.

Prime Minister Bill English’s National Party has vowed to support free trade as global protectionism rises, in particular, by championing the Trans-Pacific Partnership pact, which Labour has said it would renegotiate.

The New Zealand dollar, the 11th most traded currency in the world, slipped to $0.7295 on Wednesday after climbing to $0.7320 overnight following a separate single poll released on Tuesday that put National well ahead of Labour.

“There was a bit of a reality check this morning that this is just one poll and polls are not reliable,” said Rodrigo Catril, forex strategist at National Australia Bank. “The base case is still that whoever wins they will have to form a coalition.”

The Radio New Zealand figures showed support for New Zealand First averaging 7.5 percent, while the Green Party was at 5.5 percent, giving them 9 and 7 seats respectively.

New Zealand First’s economic policies tend to have more in common with those of Labour, but it has formed coalitions with both major parties in the past.

Polls in recent weeks have suggested widely varying outcomes from the vote. A poll on Tuesday gave the National Party a near 10-point lead over Labour, suggesting they wouldn’t need NZ First to form government.

Earlier polls had given Labour a sizeable lead after it gambled on a late change of leadership, installing 37-year-old Jacinda Ardern, to revive its flagging popularity.

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