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Euro to New Zealand Exchange Rate – EUR/NZD Recovers Ground after ZEW Reports

The ‘Kiwi’ experienced a reversal of fortunes overnight as inflation data for New Zealand upped the odds of a Reserve Bank of New Zealand rate increase and boosted the South Pacific asset.

The inflation report showed that consumer prices rose by 0.1 per cent in the fourth quarter of 2014, quarter-on-quarter, rather than declining 0.1 per cent as expected.

On the year, consumer prices in the South Pacific nation advanced by 1.6 per cent.

The result adds to the argument for the RBNZ being the first developed central bank to increase interest rates in 2014.

Over 50 per cent of traders now envisage the official cash rate rising from 2.50 to 2.75 when the central bank gathers next week.

According to one Sydney-based currency strategist; ‘The view is that the RBNZ was looking for an excuse to maybe start the tightening cycle as early as next week, then maybe this headline increase would give them the excuse to do that. That’s the reason that the New Zealand Dollar has jumped up on the numbers.’

The Euro began the European session trading more softly against the New Zealand Dollar but was able to recover ground despite a ZEW economic sentiment survey for Germany falling short of forecasts, unexpectedly dipping by 0.3 in January. Economists foresaw the measure advancing to 64.0.

However, while the result was slightly disappointing the Euro was able to hold relatively steady after its release as a separate measure of the current situation in Germany surged from 32.4 to 41.2 and a measure of economic sentiment for the Eurozone as a whole jumped from 68.3 to 73.3.

A lack of additional economic data for New Zealand could limit movement in the EUR/NZD pairing over the next 24 hours, but the Business NZ performance of manufacturing index (due out at 21:30 GMT tomorrow) could help the ‘Kiwi’ recover its previous gains.

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,1.3553,
Euro,,British Pound,0.8242 ,
Euro,,Australian Dollar,1.5390 ,
Euro,,New Zealand Dollar,1.6307 ,
Euro,,Canadian Dollar,1.4899,

As of 11:20 GMT