Less gloomy outlook boosts kiwi; NZ shares rise

The pre-election economic and fiscal update showed a less severe hit to the economy from the covid-19 pandemic in the short-term, although it projected a slower recovery in coming years.

“The market appears to have fixated itself on the reduced unemployment rate forecast in that release,” said Mike Shirley, a senior trader at Kiwibank. 

“From a market perspective that is a net positive and it was reflected in the currency.”

The latest forecast project the unemployment rate peaking at 7.8 percent in the March quarter of 2022, having previously predicted it rising as high as 9.8 percent in the current September period.