Risk averse conditions in financial markets supported the Euro (EUR) this week extending recent gains against the New Zealand Dollar (NZD) to 1.6750 (0.5970) where it sits in early Friday trading. New Zealand GDP data for the second quarter published much higher than the 1.0% markets were predicting at 1.7%, this shouldn’t persuade the RBNZ to change up their policy over the coming months as inflation – the root of the economic problems still needs managing. The RBNZ should still keep the view of another 1.0% of hikes this year to 4.0%. The Euro looks overbought and could test 0.5880 (1.7000) support, we think this area should hold as the kiwi is expected to recover losses.
The current interbank midrate is: NZDEUR 05962 EURNZD 1.6772
The interbank range this week has been: NZDEUR 0.5962- 0.6083 EURNZD 1.6439- 1.6771