Ella 
NZD/USD continued to fall for the third consecutive day on Thursday. The pair traded around 0.6100 in the European session after the New Zealand Treasury released its annual budget. According to the official record of the New Zealand government website (www.beehive.govt.nz), its Finance Minister Nicola Willis said that the 2024 Budget outlines the government’s plan to rebuild the economy, reduce the cost of living, improve health and education services, and restore law and order.
The New Zealand government will save AUD 23 billion over four years, responsibly fund tax relief, and provide additional support for priority frontline services. Increase capital funding by NZD 7 billion through the increase of multi-year capital allowances, so that we can invest in the infrastructure needed for future growth and recovery.
New Zealand Finance Minister Nicola Willis said that the Treasury believes that inflation will fall below 3% in the third quarter and fall to 2% around 2026. The New Zealand Treasury believes that New Zealand’s GDP will shrink in the first half of 2024 and grow in the second half of 2024.
On the dollar side, hawkish comments from Fed officials heightened market concerns about potential rate hikes, fueling risk aversion. This supported the US dollar (USD) and weakened NZD/USD.
However, a downward correction in US Treasury yields weighed on the dollar, limiting the pair’s losses. Traders await US GDP annual rate (Q1) data on Thursday and core personal consumption expenditures (PCE) price index data on Friday.
