NZD/EUR: 0.62 level should be tough to breach - Westpac

NZD/EUR’s corrective rebound reached its target at 0.62, and that level should now prove tough to breach, suggests Imre Speizer, Research Analyst at Westpac.

Key Quotes

“The German elections, based on provisional results, is likely to result in a loss of seats for the incumbent, which could hang over the EUR for some time. The event calendar this week includes German IFO sentiment (25th), EZ confidence surveys (28th), EZ CPI (28th), German government formation, and Brexit negotiations.”

“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.”