EURNZD Looking to Push Even Higher
EURNZD Dollar News and Talking Points
- New Zealand GDP missed expectations last week.
- The RBNZ will leave rates unchanged for the foreseeable future.
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EURNZD Will Push Higher as RBNZ and ECB Monetary Policy Outlook Diverges
EURNZD is currently approaching its highest level since mid-Decemberand is set to continue to make new highs ahead of the RBNZ latest monetary policy announcement late Wednesday. The central bank is expected to leave all monetary policysettings unchanged – interest rate at 1.75% - especially after last week’s GDP figures missed market expectations. The RBNZ is also expected to change focus soon and look to expand employment as well as keeping inflation in check, meaning an accommodative central bank will be expected to keep rates low for longer.
The European Central Bank on the other hand is currently battling when it should finally end its current bond buying program (QE) and how and when it should start raising rates. The latest ‘ECB sources’ stories point to a central bank shifting the debate to interest rates and away from QE with a rate-hike in mid-2019 now starting to get priced into the market. While any rate hike is at least one year away, any official timetable from the ECB on rate hikes will push the EUR higher with the single currency receptive to any ECB chatter.
While the EURNZD chart looks overbought on the stochastic indicator, a break above the March 8 high of 1.71320 will open the way to late the December 1 high of 1.74820.
EURNZD Price Chart Daily Time Frame (October 11, 2017 – March 21, 2018)
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--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.