WSJ:New Zealand Dollar Tad up Late Focus Remains on US Dollar
By Lucy Craymer
WELLINGTON--The New Zealand dollar was trading slightly higher late Wednesday, though investors were also keeping an eye on the U.S. dollar.
The New Zealand dollar was trading at US$0.8209 at 0615 GMT compared with US$0.8293 Tuesday. The New Zealand dollar was unchanged at A$0.8302 late Tuesday.
Western Union Business Solutions Corporate Dealing Manager Chris Hunter said that recent positive economic data out of the U.S. were supporting demand for the U.S. currency, which was putting some pressure on the New Zealand dollar.
He said exporters should try to lock in rates as "at some point in time, the U.S. dollar will stop its resurgence and the fundamentals of the Kiwi, the interest rate differentials...are going to come back to the fore and the New Zealand dollar will return back to that recent trading range."
Earlier in the day the International Monetary Fund said in a report it believed the New Zealand dollar was around 10% to 15% overvalued. It also said the New Zealand government's deficit-reduction efforts struck "the right balance between sustaining demand and limiting the growth of public debt."
New Zealand's government budget is due to be released at 0200 GMT Thursday. Investors' focus will be on whether the government continues to forecast a surplus in the year to June 30, 2015, as it has promised.
All eight economists surveyed by the Wall Street Journal expect the budget to forecast a surplus in the government accounts for fiscal 2015, though it could be as small as NZ$50 million, one said. Trimming government debt is particularly important in New Zealand because of its high net external public debt.
The New Zealand April 2015 government bond rose 1.5 basis points to end at 2.50%, while the April 2023 bond rose five basis points to 3.48%.
