Quantitative Easing has been announced by ECB yesterday, and rest of political risk factor is Greek election in short term.
While EUR has been weaken against most of currencies remarkably after the QE announcement, NZD has not been relatively stronger than other currencies. Market consensus in New Zealand implies that NZ reserve bank is expected to cut interest rate in this year and the rate will be reviewed in next week. NZD has been weaken against other currencies, including EUR early this week.
Slower than expected inflation data earlier this week stoked speculation New Zealand's Reserve Bank may lower interest rates this year, and traders are pricing in 9 basis points of cuts over the coming 12 months, according to the Overnight Index Swap curve. Governor Graeme Wheeler will review the 3.5 percent official cash rate next week, and is expected to keep it on hold.
Ref. NZ dollar heads for 3.5% weekly drop as US economy shines
Technical side, trend and momentum in EURNZD indicates it is expected downward trend toward middle of next week. Although market consensus probably have taken into account Greek election on Sunday, Syriza leading, unexpected result or policy would bring volatility into the ma
rket. NZ reserve bank is expected not to cut interest rate in next week, despite their probably cutting in this year. If the rate is unexpectedly cut, NZD will be weaken and EURNZD will go up.
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