EURNZD - can be a great chance for BUY!!!
The single currency has appreciated considerably since its March lows making euro zone goods more expensive for the rest of the world and dampening price pressure from imported goods. While the majority of analysts don’t expect much policy action and think the ECB will wait until December, there is a remote chance of tweaks to its guidance this week, backed by new staff projections.Market watchers believe the European Central Bank (ECB) could fine-tune its policies this week, and may even follow the Federal Reserve by revising its inflation targets in the longer term.
The ECB’s Governing Council will convene on Wednesday and Thursday to discuss its monetary policy stance and its assessment of the euro zone economy. Since its last meeting, economic data has shown signs of a slowing of the recovery, the euro has appreciated and core inflation slumped to a new record low in August. So any signal by ECB for additional stimulus can strength the position for EUR and it can start gaining back its losses.
Meantime for NZD New Zealand’s benchmark three-year bond yield slid below zero for the first time on Wednesday as expectations rise for the central bank to take its key interest rate negative.
The nation’s April 2023 bond yield dropped as much as 6.5 basis points with mid-level yields touching -0.006%. Swap markets are already pricing for the Reserve Bank of New Zealand to cut by 50 basis points to -0.25% by the fourth quarter of next year.
Under this conditions EURNZD can be seen as a perfect buy opportunity for the next couple days
The ECB’s Governing Council will convene on Wednesday and Thursday to discuss its monetary policy stance and its assessment of the euro zone economy. Since its last meeting, economic data has shown signs of a slowing of the recovery, the euro has appreciated and core inflation slumped to a new record low in August. So any signal by ECB for additional stimulus can strength the position for EUR and it can start gaining back its losses.
Meantime for NZD New Zealand’s benchmark three-year bond yield slid below zero for the first time on Wednesday as expectations rise for the central bank to take its key interest rate negative.
The nation’s April 2023 bond yield dropped as much as 6.5 basis points with mid-level yields touching -0.006%. Swap markets are already pricing for the Reserve Bank of New Zealand to cut by 50 basis points to -0.25% by the fourth quarter of next year.
Under this conditions EURNZD can be seen as a perfect buy opportunity for the next couple days
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ECB made a new statement yesterday. The Bank said they will carefully monitor EURO appreciation as expensive EUR can weigh on export of the union. However we don`t expect any intervention at the moment as EUR is for away from being overvalued. Meantime, The euro also got a boost Thursday when Lagarde announced a “strong” economic rebound in the euro area.
In this context, the central bank revised up its growth forecast slightly for 2020. Gross domestic product is seen now dropping by 8% this year, from a June estimate -8.7%. For 2021, the ECB expects GDP to grow by 5% and by 3.2% in the year after that.
So currently the appreciation of EURNZD and the breakthrough of 1.779 looks like more likely. The traders you took the current position are in profit already but we expect more profit coming.
In this context, the central bank revised up its growth forecast slightly for 2020. Gross domestic product is seen now dropping by 8% this year, from a June estimate -8.7%. For 2021, the ECB expects GDP to grow by 5% and by 3.2% in the year after that.
So currently the appreciation of EURNZD and the breakthrough of 1.779 looks like more likely. The traders you took the current position are in profit already but we expect more profit coming.
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