S&P Global affirmed New Zealand’s “AA/A-1+” foreign currency and “AA+/A-1+” local currency sovereign credit ratings. A positive outlook is also retrained for the near future. The rating agency said the country’s “monetary policy flexibility, wealthy economy, and solid institutions” are enabling “decisive policy actions” and putting the country in a strong position for economic recovery after the coronavirus pandemic.
Also, “the positive outlook reflects our view that New Zealand’s strong fundamentals would allow its fiscal profile to strengthen after the Covid-19 outbreak subsides, leading to a rating upgrade in the next one to two years.”
NZD/USD, however, follows risk appetite lower today. Bearish divergence condition in 4 hour MACD suggests short term topping at 0.6176. Focus is back on 0.5910 support. Break there will indicate completion of the corrective rebound from 0.5469. Near term outlook will be turned bearish for retesting this low. In case of another rise, we’d anticipate strong resistance from 61.8% retracement of 0.6755 to 0.5469 at 0.6264 to limit upside.
