The Euro to New Zealand Dollar exchange rate declined today in response to news that the Reserve Bank of New Zealand (RBNZ) decided to leave interest rates on hold at 1.75%, an expected. The lack of action proved positive for the New Zealand Dollar as it demonstrated further unwillingness for the RBNZ to move towards a dovish outlook.
Graeme Wheeler, Governor of the central bank, acknowledged the nation’s lacklustre GDP growth for the first quarter, but otherwise offered an optimistic outlook for New Zealand’s economy, he said:
‘GDP growth in the March quarter was lower than expected, with weaker export volumes and residential construction partially offset by stronger consumption. Nevertheless, the growth outlook remains positive, supported by accommodative monetary policy, strong population growth and high terms of trade.’
This news continues to propel the New Zealand Dollar against the Euro, which is looking somewhat bearish following a lack of domestic data.
Euro Exchange Rates Could Gain Long-Term on Plans for Stronger Eurozone
The Eurozone’s political outlook is providing some with more faith in the future of Euro (EUR) exchange rates, however, as new (and very much pro-EU) French President Emmanuel Macron seeks to create stronger diplomatic ties between France and Germany. German Chancellor Angela Merkel has shown a willingness to back Macron’s proposals for a reformed and very much integrated Eurozone, particularly in regards to proposals for things like a Eurozone budget. If such plans come to fruition and the Eurozone’s outlook brightens, the Euro could benefit.
EU Commissioner Pierre Moscovici prognosticated on this in May, claiming that Macron’s primary task will be the strengthening of ties between the member states through ‘reinforced cooperation’ for a ‘multi-speed Europe’.
He described Macron after his election success:
‘He has now a mandate and this mandate is to propose to our European partners a deeper integration and especially a deepening of the euro zone.’
New Zealand’s Credit Card Spending figures were also released today. As these numbers offer an indication of consumer spending they provide further insight into consumer confidence. The report demonstrated growth year-on-year; 6.5% up to 7.6%, credit card spending was down month-on-month. This news seems to have propelled the New Zealand Dollar further against the Euro – and indeed most of the majors.
May’s Brexit Comments, Eurozone PMIs Ahead
Further EUR/NZD exchange rate movement could occur tonight as Theresa May outlines her guarantee regarding EU expats in Britain, and vice versa.
If the response is strong, it may restore a semblance of trader confidence in Brexit and perhaps in the Euro itself, as the expat situation was of great concern for some.
June Eurozone PMIs will be published on Friday and are currently forecast to express a slight deceleration in growth for this month – if this is indeed the case it could weigh on the Euro.
Current Interbank EUR NZD Exchange Rates
At the time of writing, the Euro to New Zealand Dollar (EUR NZD) exchange rate is trading at 1.5355 and the New Zealand Dollar to Euro (NZD EUR) exchange rate is trading at 0.6511