While the ‘Kiwi’ rallied last week as the Reserve Bank of New Zealand increased interest rates for a second month, the commodity-driven currency has trimmed gains as a result of profit-taking. On-target domestic trade data failed to prevent the asset’s decline.
The New Zealand Dollar slid against the Euro and Pound as investors bet that the currency might not advance further and took profits accordingly.
In the view of industry expert Stuart Ive; ‘Everything is priced in for the Kiwi in terms of these rate rises and when you are at elevated levels, you have only one place to go. People are quite happy to sell the Kiwi at elevated levels that we are seeing currently and it does appear that it is beginning to struggle a little bit’.
While an easing in the Ukraine tensions has supported higher-risk assets like the ‘Kiwi’, the EUR/NZD pairing closed Australasian trading stronger.
The ‘Kiwi’ remained softer in spite of the publication of optimistic trade data for New Zealand.
The figures showed that New Zealand’s annual trade surplus widened in March, growing to 805 million Dollars. This was less than the 902 million Dollars expected but a big increase on the negatively revised 617 million figure recorded in February.
The strength in the Euro to NZD pairing largely derived from the hope that today’s German inflation data will show that consumer prices increased in April, year-on-year.
The Euro was boosted earlier in European trading by impressive German consumer confidence data and was little-changed after separate reports showed a 0.2 per cent monthly decline in Italian retail sales. Sales were down by 1.0 per cent on the year.
As the day progresses further Euro to New Zealand Dollar movement is likely to occur in response to the Eurozone’s consumer and industrial confidence reports.
Tomorrow’s activity outlook data for New Zealand could also be of interest.
Euro (EUR) Exchange Rates
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Currency, ,Currency,Rate ,
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Euro,
Euro,
Euro,
Euro,
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