New Zealand dollar remains well supported

The New Zealand dollar remained well supported against both sterling and the aussie yesterday, as markets awaited the release of a host local economic data, starting with Trade Balance figures released overnight.

• New Zealand Trade Balance data revealed a third consecutive monthly trade surplus in April, while the annual deficit narrowed to NZ$4.1 billion.
  
• This could be the start of a volatile period for the kiwi, with events culminating in the government’s budget on Thursday.
  
• Pressure remains on the government to produce a balanced budget which will appease ratings agencies. Failure to do so may threaten the country’s AA+ credit rating, which would put further pressure on the kiwi.