NZD/EUR: 0.60-0.62 likely during the week ahead - Westpac

After dipping briefly below 0.60 last week, NZD/EUR appears in need of consolidation, with 0.60-0.62 likely during the week ahead, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“A light week for data keeps politics to the fore. Spain’s semi-autonomous Catalonia (20% of Spanish economy) continues to face off against the central government. A declaration of independence might be illegal, but could still trigger constitutional crises in Spain and EU. Catalonia would need to apply for EU membership and await entry into the Eurozone.”

“The event calendar this week includes EZ final CPI (17th), and the ZEW survey (17th). There’s also negotiations with Catalonia to watch.”

“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.”