By Jonathan Barrett and Ana Nicolaci da Costa

WELLINGTON (Reuters) - New Zealand prime minister-designate Jacinda Ardern said on Tuesday her new Labour-led government plans to review and reform the Central Bank Act to possibly include employment, alongside inflation, as a dual target.

New Zealand First, the junior partner in the new coalition government, also wants to broaden the central bank's focus to include greater management of the local dollar's value against other currencies.

"We have been looking at changing the objectives set out in the Reserve Bank Act," Ardern told reporters in Wellington.

"The objectives of the Act to possibly include employment is certainly part of our plans."

The New Zealand dollar suffered a fresh setback on Tuesday as Ardern and New Zealand First leader Winston Peters confirmed their policy priorities. The kiwi dollar shed all its early gains to be back at $0.6954, having briefly been as high as $0.7003 at one point.

Rather than just focusing on inflation, Labour wants the Reserve Bank to have a full employment goal when devising policy settings, bringing it into line with the United States and Australia.

While unemployment in New Zealand is at near decade lows of below 5 percent, job growth was a hot political issue during the recent election.

The unlikely alliance between the center-left Labour and populist New Zealand First was brokered after a Sept. 23 election failed to deliver a majority to the governing National or opposition Labour.

Peters has been offered the role of deputy prime minister, which he is likely to accept, and Ardern indicated on Tuesday that Peters would also become foreign minister, putting a protectionist at the forefront of New Zealand's international relations.

Peters was foreign minister in a Labour-led government in 2005, during which time he became among a handful of Western politicians to visit North Korea.

Labour and New Zealand First share similar policies designed to cut immigration and ban foreigners from buying existing property. While a "confidence and supply" agreement with the Greens is delivering policies across the political spectrum, such as a push to legalize cannabis for personal use.

(Reporting by Jonathan Barrett and Ana Nicolaci da Costa in Wellington. Additional reporting by Wayne Cole in Sydney. Editing by Peter Cooney and Michael Perry)