EUR/NZD Outlook:
Bearish, as the rate is below its recent average and near recent lows, influenced by cautious market trading.
Key drivers:
• Rate gap: The European Central Bank (ECB) is keeping interest rates steady while the Reserve Bank of New Zealand (RBNZ) is signaling potential rate cuts, which weakens the NZD.
• Risk/commodities: Recent oil price surges may keep inflation concerns high, indirectly affecting the euro's appeal for investors.
• Macro factor: Ongoing global trade tensions have created a risk-averse environment, making the risk-sensitive NZD less attractive.
Range:
Expect EUR/NZD to drift within its recent range, with a focus on lower movements given the current rate position.
What could change it:
• Upside risk: A more robust economic data release from the Eurozone could improve the euro’s outlook.
• Downside risk: Further negative developments in global trade relations might add pressure on the NZD, limiting its recovery.
