The Euro to New Zealand Dollar exchange rate looks set to end the week on a low.
The pairing briefly softened to 1.5976 on Friday following the release of economic reports for Germany and New Zealand.
Overnight New Zealand’s building permits data showed a 1.5 per cent month-on-month increase in April, which wiped the floor with expectations of a 3.5 per cent decline.
March’s monthly increase in building permits was positively revised to 9.2 per cent.
The trend for building permits for new dwellings is now at its strongest level since 2007 and industry expert Neil Kelly commented; ‘The trend for new dwellings has doubled since the low point in March 2011, but is still 27 per cent below the series peak in 2004’.
Earlier this week data from Fonterra (the world’s biggest dairy producer) had a negative impact on the New Zealand Dollar, but these figures helped the ‘Kiwi’ recover losses against the Pound and advance to a two day highs against the Euro and US Dollar.
The Euro meanwhile came under pressure as Germany’s retail sales report for April showed an unexpected decline.
A month-on-month sales increase of 0.2 per cent had been expected to follow the positively revised gain of 0.1 per cent in March.
However, sales actually dropped by 0.9 per cent.
Despite this, year-on-year sales were considerably stronger than anticipated, with an annual gain of 3.4 per cent smashing expectations for a 1.5 per cent increase.
March’s annual figure was also revised, this time to a drop of 1.1 per cent.
While the Euro experienced only minimal movement after the report was published, the common currency is still in line to post a monthly decline against the majority of its currency counterparts.
The Euro has been feeling the heat ever since the May European Central Bank policy meeting, at which it was hinted that additional fiscal stimulus would be introduced in June.
With the next ECB meeting just days away, investors are erring on the side of caution and the Euro has shed 1.9 per cent against the US Dollar over the past four weeks.
If the ECB takes aggressive steps (such as announcing a combination of an interest rate cut, negative deposit rate or bond buying scheme) the Euro could broadly soften.
If you have an interest in the EUR/NZD pairing you may also wish to watch out for next week’s German/Eurozone manufacturing PMI, Germany’s CPI, China’s non-manufacturing and manufacturing PMI, the Eurozone’s employment and inflation data, Eurozone GDP and New Zealand’s house price data.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
Euro,,New Zealand Dollar,1.6029,