Forex: NZD/USD: NZ Unemployment Rate to hit 4% by 2021

on Nov 29, 2013
Updated: Oct 21, 2019
Listen Friday, November 29th:_ The NZD/USD yesterday opened at 0.8149, rose to a high of 0.8176, but found resistance at that level and then fell to a low of 0.8105, before closing at 0.8111 to log a 0.38 percent loss.

In today’s trading thus far the price initially fell to an intraday low of 0.8083 and subsequently rebounded above the psychological level of 0.8100 to an intraday high of 0.8143. At press time the price is changing hands at 0.8142.
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The New Zealand Ministry of Business, Innovation and Employment (MBIE) forecasts report released today says that job growth and higher retirement rates are expected to lower the unemployment rate to four percent by 2021.

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The Medium-Long Term Employment Outlook report forecasts a slightly faster rise in the near term, with total new jobs generated between 2011 and 2016 expected to increase by 180,300, followed by a further 174,500 jobs by 2021. The report says that “this represents employment growth of about 1.6 percent per year (or 36,000 on average) and about 1.4 percent per year (or about 34,900 on average) respectively”.

This assumes an average annual GDP growth of 2.7 percent and 3.0 percent over the 2011-16 and 2016-21 periods, respectively.
“Higher labour supply costs and increased capital investment are expected to contribute to annual productivity growth, rising by more than one-third from 2016 to 2021, compared with the previous five years.”
The report also states that “strong employment growth is expected in the primary sector, primary processing, certain manufacturing industries such as machinery and equipment, metal products and in construction-related activities”.

The MBIE says that service industries would grow strongly, with the greatest new demand for highly skilled workers including managers and professionals. Nearly the half (149,900) of the forecast 354,800 jobs to be created are expected to be highly skilled.

“The unemployment rate (currently 6.2 percent of the workforce) over the projection period is expected to trend down to 4.8 percent by 2016 and 4 percent by 2021. Increasing labour supply constraints from an ageing population underpin this outlook” notes the MBIE.
The NZD/USD today is expected to be driven mostly by general market sentiment as there are no US economic reports scheduled to be released.
Resistances: 0.8155, 0.8175 and 0.8200.
Supports: 0.8090, 0.8070 and 0.8050.
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