NZD/EUR: Potential to break below the 0.6000 area - Westpac

Imre Speizer, Research Analyst at Westpac suggests that NZD/EUR retains potential to break below the 0.6000 area (where it spent much time earlier this year) during the week ahead.

Key Quotes

“Draghi’s silence on monetary policy last week was deafening, markets interpreting it as an openness to withdrawing monetary policy stimulus during the year ahead (EUR-supportive).”

“The data calendar this week includes GE IFO and panEZ business surveys as well as GE and EZ consumer confidence, national and EZ CPI, GE retail sales and final PMIs. ECB meets 7 Sep in run up to GE federal elections (24th Sep).”

“3 months ahead: European economic data is improving, witness sentiment surveys at six year highs. However, after easing recently, political tensions in the EU could still resurface, with Austria calling early elections in 4Q, and a chance of early elections in Italy. Barring political shocks, NZD/EUR should gravitate to the high 0.50s.”