Analysts at ANZ note that the NZD/EUR has tested recent lows of late and from a fundamental perspective, and they believe that this cross will continue to weaken over the medium term, especially given ANZ’s overarching view of tighter global liquidity and increased market volatility.
Key Quotes
“However, there are some critical hurdles relating to the European economic backdrop that needs to be cleared over the coming months before a sustained EUR rally can be expected. These include Italian budget discussions, Brexit negotiations, the forthcoming 2019 European parliamentary elections and the volatile situation in Turkey.”
“Even though there has been some tentative signs of improvement in the euro area data flow, we suspect investors will be reluctant to embrace this improvement until this ‘event risk’ in the European calendar has passed.”
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