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.
A further improvement in the Euro’s fundamental drivers in the short-term continues to shield the single currency from longer-term political concerns. This week, attention turns to the ECB for their first meeting of 2017.