Bias: The Euro to New Zealand Dollar exchange rate is range-bound, being just slightly below the 90-day average and in the middle of the 3-month range.
Key drivers:
• Rate gap: The European Central Bank is maintaining a neutral stance, while the Reserve Bank of New Zealand is in an easing cycle, cutting rates to stimulate growth.
• Risk/commodities: As oil prices are above average, this may help support the NZD against the EUR, particularly as New Zealand is sensitive to global commodity prices.
• One macro factor: Recent contractions in German exports could weigh on the Euro, contributing to its subdued performance against the 'kiwi’.
Range: Expect the EUR/NZD to continue moving within its recently stable range, potentially testing both extremes but remaining broadly within these bounds.
What could change it:
• Upside risk: A strong recovery in Eurozone economic indicators could bolster the Euro.
• Downside risk: Continued global trade tensions impacting New Zealand's exports could further weaken the NZD.