NZ Dollar Strongest After S&P Upgrades Credit Rating

The New Zealand dollar was the strongest among the most-traded currencies on the Forex market today after Standard & Poor’s upgraded New Zealand’s credit ratings with a stable outlook.
Standard & Poor’s announced today that it raised New Zealand’s foreign currency sovereign ratings to ‘AA+/A-1+’ from ‘AA/A-1+’ and the local currency sovereign ratings to ‘AAA/A-1+’ from ‘AA+/A-1+’. The rating agency cited the following reasons for its decision:

New Zealand is recovering quicker than most advanced economies because the country has been able to contain the spread of COVID-19 better than most others. This provides us with better clarity over the extent of the pandemic’s damage to the government’s balance sheet. We now believe that the government’s credit metrics can withstand potential damage from negative shocks to the economy, including a possible weakening of the real estate market, and its fiscal position at the ‘AA+’ rating level.

It added further:

New Zealand’s monetary flexibility, wealthy economy, and institutions are conducive to swift and decisive policy actions and offset the country’s external imbalances.

For now, the New Zealand dollar will be reacting to shifts in the general market sentiment and also can be influenced by retail sales data released during the early Asian trading session on Tuesday. But the major event affecting the currency will likely be the central bank’s monetary policy announcement on Wednesday.
NZD/USD rose from 0.7287 to 0.7318 as of 12:51 GMT today and its daily high of 0.7339 was the highest since April 2018. EUR/NZD was down from 1.6598 to 1.6578, touching the low of 1.6535 intraday — the lowest since July 2019. GBP/NZD fell from 1.9202 to 1.9158.
If you have any questions, comments, or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

Original from: www.earnforex.com