The New Zealand dollar rose after Finance Minister Bill English signalled bigger fiscal surpluses were coming in an economy seen to be growing faster than previously thought, and ahead of US data.
The kiwi advanced to 86.79 US cents at 5pm in Wellington from 86.62 cents at 8am, almost unchanged from 86.60 cents yesterday. The trade-weighted index rose to 80.69 from 80.47 yesterday.
New Zealand's government anticipates the operating balance before gains and losses will be a surplus of $372 million in the year ending June 30, 2015, wider than the $86 million projected in the December half-year forecast, rising to $3.5 billion 2018.
The optimistic outlook for the Crown accounts come as the economy is forecast to grow 4 percent in the year ending March 31, 2015, the fastest since growth of 4.2 percent in 2004 and an improvement on the 3.6 percent pace the Treasury was projecting back in December. The budget was well-received by rating agencies Standard & Poor's and Moody's Investors Service, meeting both their expectations.
"The budget was pretty stock-standard - I certainly don't see how Labour (the major opposition party) can attack it," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. "There's pretty good support at 86 (US cents) and sellers above 87 - we're going nowhere fast."
