The Euro to New Zealand Dollar (EUR/NZD) exchange rate was trending within a limited range on Thursday morning, having advanced significantly during the Australasian session.
With a distinct lack of progress made with the Eurogroup and time rapidly running out, Athens stated the intention to intensify talks to unlock aid. However, this broken-record rhetoric has caused the Euro to slide as traders are pessimistic about Greece’s ability to pay mounting debts.
The New Zealand Dollar, meanwhile, softened across the board after the Reserve Bank of New Zealand (RBNZ) shocked the market by cutting the benchmark interest rate. The depreciation has been somewhat slowed, however, thanks to positive economic data out of the world’s second-largest economy.
The Euro to New Zealand Dollar (EUR/NZD) exchange rate is currently trending in the region of 1.6065.
Euro (EUR) Exchange Rate Forecast to Hold Steady against the New Zealand Dollar as Greek Woes Persist
With a distinct lack of domestic data publications over the past few days, the single currency has been subject to volatility with regard to geopolitical developments. After the Brussels Summit failed to progress towards a resolution for Greece, and with time the Hellenic nation’s enemy, many fear that the lack of progress thus far is a sign that there will be no agreement. The Eurogroup are asking for austerity measures that are just not possible without seriously risking the wellbeing of the Greek people, whilst Greece is not prepared to budge on any of the electoral red-lines which saw the left-wing government take office. Should Athens fail to acquire bailout funds before the end of the month, the Greek government will almost certainly default on the consolidated loan payment to the International Monetary Fund (IMF).
‘It was agreed unanimously that the talks between the Greek government and the institutions should be pursued with great intensity,’ a German government spokesman said in a statement.
The Euro to New Zealand Dollar (EUR/NZD) exchange rate dropped to a low of 1.5990 today.
New Zealand Dollar (NZD) Exchange Rate Forecast to Trend within Tight Range against the Shared Currency after Shock RBA Intervention
Despite the majority of economists expecting the RBNZ to hold the cash rate at 3.5%, given the difficulties regarding the Auckland housing bubble, the central bank surprised the markets with a 25 basis point drop. ‘New Zealand had one of the highest cash rates in the developed world, so it’s quite a big deal that we have seen our central bank backtrack,’ said Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington.
‘The big question hanging over today’s decision is what it will do to the housing market,’ said Stephen Toplis, head of research at Bank of New Zealand in Wellington. ‘It looks like the RBNZ has simply taken the view that whatever happens to housing is not its fault but rather the government’s.’
Many now speculate that this marks the beginning of an easing cycle as Economists at ANZ state; ‘The RBNZ’s 90-day projections imply another cut before the end of the year. Normally we’d expect the RBNZ to follow up one cut with another. But interestingly, communication from the RBNZ suggests further moves will be stop-start in nature (and data-contingent of course, so every meeting is ‘live’). That seems a little too cute to us, but it does make a follow-up move in July a 50-50 proposition.’
Euro to New Zealand Dollar (EUR/NZD) Exchange Rate Forecast to Fluctuate on US Advance Retail Sales Data
Given that the position of the US Dollar has a significant impact on both currencies, the Euro to New Zealand Dollar (EUR/NZD) exchange rate is likely to fluctuate throughout Thursday’s European session. Friday’s Australasian session is also likely to see EUR/NZD volatility with New Zealand’s Performance of Manufacturing Index due for publication. Eurozone Industrial Production may also have an impact on the pairing, although geopolitics will probably dominate trader focus.
The Euro to New Zealand Dollar (EUR/NZD) exchange rate climbed to a high of 1.6146 today.