The EUR/NZD exchange rate shows a bearish bias, maintaining stability in recent trading. Key drivers include the interest rate differential, with the European Central Bank potentially keeping rates steady to manage inflation, while the Reserve Bank of New Zealand is expected to cut rates, which may dilute the NZD’s value. Additionally, the economic growth outlook for the Eurozone is positive, supported by strong GDP projections.
The near-term trading range is likely to remain tight, reflecting the current stability around its 3-month average. Factors that could alter this outlook include an unexpected resolution to geopolitical tensions in Europe, which could boost the euro, and further rate cuts in New Zealand, exacerbating NZD weakness. While oil prices are currently volatile, with movements affecting inflation and overall economic sentiment, their influence on the EUR/NZD is limited in the short term.
