NZ Treasury: Unemployment rate to peak at 7.8% vs. 9.8% forecast in budget

Dhwani Mehta FXStreet

New Zealand’s (NZ) Treasury is out with its pre-election Economic and Fiscal Update (PREFU) for this year, with the key takeaways found below (via Reuters).

NZ govt sees unemployment rate to peak at 7.8%, down from 9.8% forecast in budget.

Sees June quarter GDP at -16%, down from its previous forecast of -23.5%.

Sees 2020 GDP -3.1% (Budget -4.6%); 2021 GDP at -0.5%.

Sees 2020 net debt 27.6% of GDP (budget 30.2%).

Sees net debt rising to 55.3% of GDP in 2024.

2020 cash balance NZD23.692 bln (budget NZD-32.031 bln)

Forecasts shallower virus slump, longer impact.

Market reaction

Despite slightly better economic forecasts, NZD/USD remains on the offers while defending the 0.6700 level amid pre-Fed caution trading.

The spot trades at 0.6715, down 0.07% on the day.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD holds rebound near 0.6900 on US-China trade optimism

AUD/USD holds the rebound near 0.6900 in the Asian session on Monday. Mixed China's inflation data for October fails to provide any inspiration to the Chinese proxy, the Australian Dollar, but China's extension of the suspension of 24% tariffs on US goods and reduced US-Iran tensions help the Aussie pair cling to recovery gains.

USD/JPY retreat in sync with USD, appraches 158.00

USD/JPY is back in the red at the start of the week on Monday, eyeing the broad US Dollar retreat amid easing US-Iran tensions. Traders also resorting to profit-taking following the blockbuster US Nonfarm Payrolls data-led rally. US CPI report is next in focus.

Gold climbs to two-day highs past $4,100

Gold resumes its recovery and surpasses the $4,100 mark per troy ounce at the beginning of the week. The yellow metal’s solid performance comes amid fresh downside pressure on the US Dollar, shrinking US Treasury yields and a marked retracement in crude oil prices.

Crypto Today: Bitcoin, Ethereum, and Ripple extend downtrend as selling pressure mounts

Major cryptocurrencies, including Bitcoin, Ethereum, and Ripple, maintain a broadly corrective tone, extending losses from the previous week. Risk-off sentiment builds in the crypto market following last week’s correction linked to Democrats sweeping the US midterms.

Two Huangs don’t make a right: Nvidia CEO caught in scandal – NVDA slides

Nvidia CEO Jensen Huang sent employees an apology for being unfaithful to his wife, following reports that he may have been targeted in a foreign intelligence operation. Why is Nvidia trading roughly 5–6% below Friday’s close in the overnight market? And – more importantly – does this actually matter to the AI trade?

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.