Down the escalator up the lift describes this week’s movement in the Euro (EUR), New Zealand Dollar (NZD) with the kiwi softening through to 0.5935 (1.6850) midweek before bouncing back to post 0.6055 (1.6520) Friday. The ECB’s new “anti-fragmentation tool” announced this week should set the ECB up for more aggressive tightening hikes later in the year. The tool will give more certainty with predictions of a hike of 25 points in July, 50 points in September, October, and November to round off the interest rate at year end somewhere around the 1.25% area. NZ GDP first Q printed yesterday and wasn’t what we were looking for at -0.2% vs 0.3% expected, this follows +3.0% for the first quarter and confirmed the start of what everyone has been wary of – the inevitable looming recession. Up over 0.6000 this represents good buying in our book, buyers should consider.
The current interbank midrate is: NZDEUR 0.6022 EURNZD 1.6605
The interbank range this week has been: NZDEUR 0.5934- 0.6059 EURNZD 1.6504- 1.6851