With the situation in Greece looking set to drag on for some time yet, the Euro has come under pressure against a number of its most traded currency counterparts. At the close of last week investors learnt that Hellenic nation has been asked to present its creditors with a revised list of reforms before the end of this week. All the uncertainty and rumours of contingency plans for a ‘Grexit’ being prepared have seen the common currency slide. The New Zealand Dollar capitalised on this Euro weakness, with the NZD/EUR exchange rate achieving a new record-high.
The New Zealand Dollar to Euro exchange rate rallied to 71.20 over the weekend. According to industry expert Peter Cavanaugh; ‘The Euro is a dog. They have got bugger all growth, bugger all inflation, massively high unemployment, stupendously high youth unemployment and a central bank who has finally spat the dummy and turned on the printing presses with considerable gusto. Barring a massive New Zealand-based disaster that sends the New Zealand Dollar massively down, it’s difficult to see the Kiwi going down’.
The NZD/EUR exchange rate also derived support from New Zealand’s Card Spending/Retail Card Spending figures, published on Sunday. Retail Card Spending was shown to have increased by a solid 0.8% in March, month-on-month, in line with forecast figures and down from a positively revised 1.1% gain in February. Total Card Spending was shown to have risen by 1.3% on the month in March, over three times the 0.4% gain achieved in February.
However, while the New Zealand Dollar was performing valiantly against the Euro, it weakened against a number of its other currency counterparts following the publication of China’s latest batch of trade figures. The concerning slide in both Chinese imports and exports resulted in a much narrower-than-forecast trade surplus and undermined demand for commodity-driven currencies. The New Zealand Dollar pared its previous gain against the Euro by 0.7% and lost over 1% against the US Dollar.
In the days ahead New Zealand Dollar exchange rate movement could be caused by the nation’s Business Opinion Survey for the first quarter, domestic food price figures and New Zealand’s Business Performance of Manufacturing Index.