Euro Exchange Rate News

Euro to New Zealand Dollar Exchange Rate (EUR/NZD) Forecast to Hold Gains after RBNZ Rate Decision

Euros

During Australasian trading the New Zealand Dollar posted widespread declines as investors reacted to the Reserve Bank’s rate decision.

Although speculation surrounding a potential RBNZ rate increase has been rife, New Zealand’s central bank opted to hold the benchmark interest rate at a record low of 2.5 per cent.

However, RBNZ Governor Graeme Wheeler did stress that rates will be increased soon, but that gains in the domestic currency had given the central bank the scope to hold rates at record lows for longer.

Wheeler commented; ‘There is a need to return interest rates to more-normal levels. The bank expects to start this adjustment soon.’

The commodity-driven currency was already struggling against a buoyed US Dollar following the Federal Open Market Committee policy announcement, and as the market had priced in a 50 per cent chance of a rate increase this result inspired additional NZD/USD movement.

The ‘Kiwi’ extended declines against the Euro during the European session as the common currency was boosted by surprisingly strong German employment data and the news that economic confidence in the Eurozone rose for a ninth month in January.

EUR/USD gains may have been limited but the Euro was able to consolidate its advance against the New Zealand Dollar after a measure of consumer sentiment advanced from a positively revised 100.4 to 100.9 in January – the best reading since mid-2011.

The result was slightly shy of forecasts however, and separate reports did show an unexpected decline in Eurozone industrial confidence and a dip in the currency bloc’s business climate indicator.

German inflation figures, scheduled for publication at 13:00 GMT, could inspire additional EUR/NZD movement, as could New Zealand’s trade balance reports.

Economists will also be looking to tomorrow’s stream of European data, including German retail sales, Eurozone inflation and Eurozone unemployment.

Further signs of improvement in the currency bloc could see the EUR/NZD pairing post further gains before the weekend.

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,1.3594 ,
Euro,,British Pound,0.8265 ,
Euro,,Australian Dollar,1.5557 ,
Euro,,New Zealand Dollar,1.6703 ,
Euro,,Canadian Dollar,1.5208 ,
[/table]

As of 11:20 GMT
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