NZD/EUR trending lower - Westpac

The NZD/EUR downtrend extended further last week, and could run to the 0.58 area during the weeks ahead, suggests Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Catalonia rumbles on in the background, with Spanish equities sharply underperforming the Eurozone benchmark since the early Sep announcement of the referendum. But the common assumption seems to be that there will be no actual independence and thus no strong case to sell the euro.”

“The event calendar this week includes EZ Oct Markit PMIs (24th) and Germany Oct IFO business climate (25th). But most eyes will be on the ECB meeting on Thu 26th.”

“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 disconcerting rises in periphery parties in Germany and the prospect of Italian elections in H1 18. A German coalition may take months to form. Barring political shocks, though, NZD/EUR should gravitate lower to the high 0.50s.”