The New Zealand dollar inched up to $0.596 as investors weighed comments from Prime Minister Christopher Luxon. In a pre-Budget address, Luxon reiterated the government’s commitment to returning the budget to surplus by 2028–29 and putting public debt on a downward path toward 40% of GDP. The 2026 Budget is scheduled to be delivered on May 28.
At the same time, investors remain focused on developments in the Middle East, where escalating geopolitical tensions have driven oil prices higher. This has complicated New Zealand’s efforts to contain inflation while also supporting an economic recovery. Reserve Bank of New Zealand Governor Anna Breman recently noted that core inflation measures held steady within the central bank’s target range in the first quarter, prompting investors to scale back expectations of a rate hike in May. However, markets still fully price in an increase in July, as persistent energy-cost pressures continue to stoke inflation concerns.
