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NZD selling as NZ Treasury cuts growth outlook

FXStreet (Bali) - NZD/USD is under pressure in early Tokyo, declining towards an area of demand imbalance at 0.84 down towards 0.84, with NZ pre-election fiscal update to blame.

NZ Treasury cut the 2014/15 surplus forecast to NZ$297m vs. NZ$372m, while the 2015/16 surplus forecast was also cut to NZ$ 818m from $NZ 1.26bn. The 2014-15 growth forecast was also reduced to 3.6% vs 4%, and to 2.6% in 2015-16.

Further headlines included: "Plans syndicated 2035 inflation-indexed bond issue... NZ maintains 2014-15 bond sales program at NZ$8b... NZ FinMin English crossed the wires, noting that "sees ‘modest’ tax cut when there is room to do so, no room for significant loosening of purse strings, no tax cut package announcement for election..."

Peter Fell, Analyst at FXBeat, notes: "The two week global dairy auctions at 12 GMT will likely see a greater movement, another material fall in dairy prices would put more added downward pressure, although, I am beginning to wonder, how much has already been priced in."

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