The euro remained range-bound against the Kiwi dollar following reports of weak economic data from both New Zealand and Germany. While New Zealand reported a trade deficit for December, the German economy contracted in the December 2022 quarter. Overall, the EUR/NZD pair remained range-bound between 1.6715 and 1.6830 in the past 24 hours.
According to the data published by Statistics New Zealand, the country’s trade deficit narrowed to N$475 million in December from N$2.18 billion in November, beating forecasts of a N$1.75 billion deficit. The reported figure represents the lowest deficit in seven months and is lower than a N$990.30 million deficit in December 2021.
Goods exports increased 11% m-o-m in December to N$6.70 billion, driven by milk powder, cheese, butter, casein, caseinates, and wine.
Specifically, exports of milk powder, butter, and cheese surged 17% (or N$358 million) to N$2.40 billion.
During the same period, goods imports rose by 1.80% to N$7.20 billion, led by the purchase of aircraft and parts.
In 2022, exports grew by 14% to N$72.20 billion, driven by sales of dairy, meat, and other animal products. Likewise, cumulative imports also increased by 23% to N$86.70 billion. Overall, the trade deficit more than doubled to N$14.50 billion in 2022, from N$7.10 billion in 2021.
According to the flash data published by Spain’s National Statistics Institute, the country’s consumer price inflation inched up 5.80% y-o-y in January from 5.70% (13-month low) in December. Economists had anticipated a dip in the inflation rate to 4.90% in the reported period. Notably, the inflationary pressure was far higher than the 2% level targeted by the European Central Bank.
Core inflation, which excludes volatile goods such as unprocessed food and energy, rose to 7.50% in January, reflecting the highest level since the final leg of 1986.
According to preliminary data published by Destatis, the German economy contracted by 0.20% q-o-q (price, seasonal, and calendar adjusted) in the December 2022 quarter, following 0.40% GDP growth in the previous quarter. Economists did not anticipate any change in the GDP data.
Also in 4Q 2022, the German economy grew by 1.10% (price and calendar adjusted) from 4Q 2021.
Overall, in 2022, Germany’s GDP increased by 1.90% (price and calendar adjusted).
The weak economic data from both New Zealand and Germany are expected to keep the EUR/NZD pair range bound in the short term.
The historical price chart indicates that the EUR/NZD pair is facing resistance at 1.6830. The next support is anticipated only near 1.6490. Additionally, the currency pair is trading below its 50-day moving average, while the MACD indicator is showing a negative reading. Therefore, we anticipate the EUR/NZD pair to decline in the days ahead.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
