World First NZ Economic Update

• Budget 2011 should bring a speedy return to surplus, appeases rating agencies, however slower economic recovery could hamper this return
• The US debt ceiling issue continues to cause concern and ongoing weakness in USD
• Euro sovereign debt issues are once more in the foreground and causing a volatile and weak EUR

GBPNZD –Range bound from 2.08 to 2.04, ending trade banging against the lower 2.04 boundary

EURNZD – Trending down with some sharp drops from 1.82 to 1.78

NZDUSD – Should meet stiff resistance around 0.80 for now

NZDZAR – Rand is weak across the board, current rate at 5.5

The Budget helped the NZD outperform other major currencies. Overseas investor interest in NZ government bonds could increases. The NZD could again be a standout performer this week.