The New Zealand dollar rallied today after Standard & Poor’s confirmed the country’s sovereign credit rating and said that outlook is stable.
S&P said that New Zealand’s foreign currency long-term rating remained AA with stable outlook. The rating agency cited the following reasons for the decision:
The rating affirmations reflect our view that New Zealand’s credit metrics will continue to feature moderate fiscal flexibility, a resilient economy, and strong political and economic institutions conducive to swift and decisive policy reform. These strengths are offset by the country’s high external debt and weak external liquidity, vulnerability to swings in commodity income, high household debt, and an adverse demographic profile.
NZD/USD climbed from 0.8094 to 0.8152 and NZD/JPY advanced from 63.31 to 63.80 as of 10:23 GMT today.
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