NZD: Little impact of budget - Westpac

Imre Speizer, analyst at Westpac, explains that today’s NZ budget had little for FX markets, with the sovereign credit rating (S&P AA, positive outlook) continuing to be supported by solid fiscal metrics.

Key Quotes

“Projected operating surpluses were smaller due to extra spending, but still positive, and net debt increased but remains close to 20% GDP – low compared to most peers.”

“At the margin, given the larger-than-expected spending projected, there’s arguably less need for monetary policy easing, which should be NZD supportive.”

“However, the dominant force on NZD/USD is the US dollar’s uptrend which remains intact, and should continue to propel NZD/USD towards 0.6425 over the next month.”