What is EUR/NZD?
The EUR/NZD currency pair represents the exchange rate between the euro (EUR), the currency used by many European countries, and the New Zealand dollar (NZD), New Zealand's official currency. The exchange rate indicates how many New Zealand dollars are needed to purchase one euro.
Aa a reserve currency that is used for international trade, the euro is the official currency of the Eurozone. The European Central Bank (ECB) oversees its administration and is responsible for maintaining price stability and ensuring the smooth operation of the euro currency.
The New Zealand dollar, also known as the "Kiwi," is issued and managed by the Reserve Bank of New Zealand, the country's central bank.
Currency traders and investors closely monitor EUR/NZD and other currency pairs to analyse market trends, speculate on the future movements of exchange rates and decide if it is a good time to buy or sell.
What affects the price of the EUR/NZD pair?
The price of the EUR/NZD could experience fluctuations caused by changing market sentiment due to several factors, such as financial and geopolitical developments, or a combination of both. Those include important announcements about central bank policies, inflation rates, employment figures, and Gross Domestic Product (GDP) growth.
Geopolitical events, such as trade tensions, elections, and referendums, could also cause price fluctuations. Various developments in Europe and the Asia-Pacific region, particularly those affecting New Zealand or Australia, can influence the pair.
As New Zealand is a major exporter of commodities like dairy products, wool, meat, and forestry products, changes in commodity prices can impact the EUR/NZD exchange rate. Rising commodity prices benefit the New Zealand economy and can lead to an increase in the NZD value while falling prices can have the opposite effect.
What to watch out for when trading EUR/NZD?
New Zealand's small, open economy makes it vulnerable to changes in global economic conditions, but it is also influenced by domestic factors. To trade the EUR/NZD pair, keep an eye on data releases and statements from influential organisations in the Eurozone, European Union, and individual member countries (especially Germany and France, Europe's two largest economies), such as:
- The European Central Bank (ECB) and Reserve Bank of New Zealand (RBNZ) for interest rate and policy decisions
- Eurostat and the New Zealand Bureau of Statistics for data on Trade Balance, wages, unemployment rate, Consumer Price Index (CPI), and GDP
- Natural disasters in New Zealand and Southeast Asia such as earthquakes, tsunamis, and floods
- Commodity prices (iron ore, coal, and petroleum)
- Chinese economic data