As idle cash looks to find a strong and secure yield, it is no wonder that the New Zealand Dollar has benefited from the current Euro-Zone crisis. Pairs such as the Australian Dollar and New Zealand Dollar are often viewed as a proxy for Chinese growth and thus have performed well against the Euro in recent years. Although Chinese growth may become a cause for concern as the nation shifts away from export led growth, weakness in the Euro-Zone may cap any significant reversal.
The Reserve Bank of New Zealand’s decision in February sent the New Zealand Dollar on a four week decline across the board. It’s highly unlikely that RBNZ Governor Graeme Wheeler will alter his recently dovish tone at the RBNZ meeting this week, especially after Q4’16 GDP data came in at a slower pace than anticipated.