The New Zealand dollar spiked up against its major counterparts in Asian deals on Thursday as the nation’s Finance Minister Bill English said that the economy will return to surplus by 2014-15.
Presenting his third budget to the Parliament, English said despite additional costs of the earthquakes, net debt will remain below 30 percent of Gross Domestic Product throughout the forecast period.
He said that the budget 2011 sets out a credible path back to surplus and builds a strong platform for faster growth, more jobs and higher incomes.
The government forecasts GDP to grow 4 percent during the year ending March 2013 after a 1.8 percent expansion in the year ending March 2012.
The kiwi hit a 6-day high of 0.7939 against the U.S. dollar in Asian deals and if the kiwi gains further, it may target the 0.80 level. The pair is now worth 0.7927, compared to yesterday’s closing value of 0.7892.
Against the European currency, the kiwi rose to 1.8020 in the Asian session, its highest level since May 16. On the upside, 1.76 is seen as the next target level for the kiwi. The pair that closed Wednesday’s trading at 1.8066 is now quoted at 1.8045.
During Thursday morning in Asia, the New Zealand currency climbed to more than a 2-week high of 64.77 versus the yen, compared to Wednesday’s close of 64.47. The kiwi is now trading at 64.65 against the yen with 66.00 seen as the next upside target level.
Japan’s gross domestic product was down an annualized 0.9 percent in the first quarter of 2011 compared to the previous three months, the Cabinet Office said in a preliminary report. The first quarter reading was even worse than analyst expectations for a 0.5 percent contraction following the downwardly revised 0.8 percent fall in the fourth quarter of 2010.
On an annual basis, Japan’s GDP plunged 3.7 percent in the first quarter – well shy of forecasts for a 2.0 percent fall following the downwardly revised 3.0 percent decline in the previous three months
The kiwi edged up to 1.3447 against the aussie in Asian trading and the pair is now worth 1.3468. If the kiwi gains further, it may target the 1.33 level. At Wednesday’s close, the pair was worth 1.3477.
At 12:30 am ET, Japan’s final industrial production report for March is due for release.
In the European session, U.K. retail sales for April and Switzerland’s ZEW survey expectations for May are slated for release.
The U.S. weekly jobless claims for the week ended May 14 and the existing home sales data for April are likely to influence trading in the New York session.