New Zealand unemployment is expected to continued rising for some time, said the country's Finance Minister Bill English. "Lagging indicators such as unemployment are still worsening and we expect unemployment to keep rising for some time," said the 48-year-old head of the treasury. He also added that the ability for an export-led recovery in the nation, now suffering from its seventh straight quarterly economic contraction, will be curtailed by the surge in the country's currency. Over the last six months the New Zealand Dollar rallied by 21.3% on a trade-weighted basis. English stated that "for New Zealand to have a sustained recovery based on a stronger export sector is going to be a challenge with the dollar at current levels." But with the sovereign debt rating of the country being cut by Standard and Poor's, there may be less incentive for foreigners to purchase the country's government bonds. Keep in mind that such fixed income instruments are generally denominated in the home country's currency. As such, lower demand for bonds may end up driving the Kiwi southward. A revelation of this proportion may end up feeding the country's export sector and may allow it to lift itself toward the end of this year or possibly toward the start of 2010.
