NZD/EUR: Decline remains intact - Westpac

In view of Imre Speizer, Research Analyst at Westpac, NZD/EUR’s decline remains intact, targeting the 0.5900 area next.

Key Quotes

“At the annual Jackson Hole meeting in August, ECB Pres. Draghi did not voice any long term commitment to an easy monetary policy stance, leading markets to speculate that an exit from QE may be on the cards later this year.”

“The data calendar this week includes final PMIs, retail sales and final 2Q GDP, GE factory orders & ind. prod. The market highlight will be the ECB meeting on 7 Sep. Increasing attention may be paid to the looming GE federal elections (24 Sep).”

“3 months ahead: European economic data is improving, witness sentiment surveys at multi-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 lower to the high 0.50s.”