Breakthrough in EU Migration Talks Pushes EUR/NZD Exchange Rate Higher
The Euro (EUR) has risen to its best weekly rate against the New Zealand Dollar (NZD) today, with €1 worth around NZ$1.7165.
This advance follows news that EU leaders have come to an agreement on future migration policies, in the context of mass migration into southern Europe.
Although exact details haven’t emerged yet, the plans are thought to involve some countries voluntarily taking in migrants to reduce the strain on other nations.
Euro traders are mainly viewing the news in the context of Germany, which is the single largest economy in the Eurozone.
There were fears that the German government could fall apart under continued pressure from the migrant crisis, but the latest update has reassured EUR traders.
NZ Consumer Confidence Decline Drags NZD/EUR Exchange Rate Down
The New Zealand Dollar (NZD) has been in low demand today, falling against the Euro (EUR) and most other currency peers.
This deterioration comes after the news that Thursday night’s ANZ Roy Morgan consumer confidence reading fell in June.
The decline from 121 points to 120 puts NZ consumer confidence levels in an ‘average’ range, according to ANZ analysts.
The overall message from ANZ researchers was that slow and steady growth is here to stay:
‘Our confidence composite gauge is suggesting around 2% GDP growth. Economic momentum has been losing steam for a while and we expect the economy will struggle to grow above trend from here.
‘That said, still-low interest rates, population growth, the strong terms of trade and fiscal stimulus should be enough to keep growth ticking along.’
Euro to New Zealand Dollar Exchange Rate Forecast: Will EUR/NZD Advance on Eurozone Inflation Stats?
The Euro’s (EUR) advance against the New Zealand Dollar (NZD) this morning may continue into the weekend, as upcoming Eurozone data could further support the single currency.
This will consist of inflation rate estimates for June, which are predicted to show a core annual slowdown but a base annual acceleration in price growth.
The core reading is tipped to slow from 1.1% to 1%, but the base figure is expected to hit the European Central Bank’s (ECB) target by rising from 1.9% to 2%.
Higher inflation could increase the chances that the ECB will raise interest rates next year, so the Euro might appreciate if the base figure rises as expected.
The week’s last notable NZ data will be this evening’s building permits reading for May.
The figure showed a decline of -3.7% in April, but could cause last-minute NZD/EUR exchange rate gains if it reveals a recovery in granted permits last month.
More permit approvals would have positive implications for construction activity and the national housing supply, so could push the New Zealand Dollar higher.
