NZD/EUR looks fairly neutral for the week ahead, carving out a 0.6300-0.6550 sideways range, according to Imre Speizer, Research Analyst at Westpac.
“It’s a relatively light data calendar this week with ZEW and EU surveys (at multi year highs) and final June CPI. Brexit negotiations remain a constant risk. ECB’s 20 July meeting will be the highlight.”
“Market confidence for a shift in ECB guidance appears to be high. Although markets are focusing on the strong surveys and activity data, the ECB remains concerned about Eurozone’s 18% underemployment rate and labour slack. Praet and Draghi have repeatedly stated that the need for accommodative policy remains.”
“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. Adverse developments could push NZD/EUR beyond 0.66.”
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