The New Zealand economy managed to avoid falling into a double -dip recession after Gross Domestic Product (GDP) was reported to have tripled from market expectations in the first quarter.
GDP jumped 1.6% in the first quarter of 2021, from a 1% contraction recorded in the last quarter of 2020. This reading also beat market expectations for a 0.5% increase. Compared to the previous year, the economy was seen to have grown 2.4% from the expected growth of 0.9%.
The booming property market and fiscal and monetary stimulus are said to be among the factors that helped the economy weather the recession due to border closures that have devastated major tourism industries.
Following this encouraging data reading, the kiwi dollar regained support to rise in the Asian session, after plunging lower following the strengthening of the greenback dollar following the Federal Reserve's (Fed) optimistic statement.
In addition to the reading of New Zealand economic data, the market was also shown with the publication of the Australian employment report which also displayed a positive reading.
Australia’s unemployment rate beat market expectations to remain at 5.5%, declining lower at 5.1% in May. Employment was also reported to have increased by 115,200 compared to the expected increase of 30,000, while the participation rate increased to 66.2%.
This reading has indirectly brought Australia’s unemployment rate back to pre-pandemic levels in February 2020, after being supported by continued fiscal and monetary stimulus.
The Aussie dollar also rose following this optimistic data, but the movement exhibited was somewhat limited due to the strengthening US dollar.
