The Euro adopted a softer stance against several of its major rivals as the week began.
After European Central Bank President Mario Draghi intimated that the central bank is still prepared to take any action necessary to defend against inflation risks, the common currency edged lower against peers like the US Dollar and Yen.
Speaking to reporters yesterday Draghi stated; ‘We don’t see what is defined to be deflation. We are aware of the risks. The Governing Council is willing and ready to take any action in case these risks were to gain strength.’
While the Euro remained stronger against a pressured ‘Aussie’ the currency did slip modestly against the New Zealand Dollar ahead of the release of German business confidence figures.
During Australasian trading the New Zealand Dollar was supported by the news that credit card spending in New Zealand increased by 1.0 per cent in January, month-on-month, following a positively revised decline of 0.7 per cent.
On the year credit card spending was up 9.2 per cent following December’s annual 4.7 per cent advance.
However, the spending report had comparatively little impact on the ‘Kiwi’ and the falling price of iron ore kept pressure on the commodity-driven currency.
In the hours ahead the Euro could rebound against its rivals thanks to better-than-expected German IFO business climate, current assessment and expectations reports.
That being said, movement may be limited ahead of the publication of Eurozone inflation figures.
Industry experts have forecast that the New Zealand Dollar will trade in a fairly narrow range in the days ahead, with EUR/NZD movement largely driven by news from Europe.
According to Stuart Ive; “We don’t have a great deal of data this week, not just here but globally. The downside is beginning to get very limited for the Kiwi now.”
Similarly, senior advisor Peter Cavanaugh commented; ‘There was no exciting data over the weekend, particularly from the US. The markets are waiting for a reason to do something and at the moment they haven’t got anything. We are just in the doldrums, waiting for the wind to pick up in whatever direction it does.’
Wednesday’s trade balance figures for New Zealand are forecast to show that the dairy sector continues to support the nation’s exports.
Tomorrow’s conference board leading index for China may also have an impact on the New Zealand Dollar’s exchange rate.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3519 ,
Euro,,British Pound,0.8286 ,
Euro,,Australian Dollar,1.5190 ,
Euro,,New Zealand Dollar,1.6491 ,
Euro,,Canadian Dollar,1.4963 ,