Giles Coghlan LLB, Lth, MA
Financial Source
Listen to the latest market mood for the EURNZD pair.
Weak EUR, Strong NZD
Expectations of the RBNZ keeping rates on hold rather than moving to negative rates have increased after New Zealand PM Arden has requested Governor Orr to consider house prices in setting monetary policy. This saw a sharp rise higher in NZ 10 year bonds as the RBNZ are now seen as even less likely to ease rates.
The EUR remains bearish with deflationary concerns, growth concerns, and delays in the recovery fund and budget.
Therefore expect EURNZD sellers on pullbacks.
Trade Risks
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The main risk to this trade is if Governor Orr comes out tonight and is bearish regarding future rate moves.
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The other risk is if the RBNZ financial stability report paints a more bearish picture regarding the NZD economy.
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