EURNZD: Live Euro-New Zealand Dollar Rate, Chart and Forecast
The foreign exchange market is one of the most significant components of the capital market and is 27 times larger than the global equity market. It is also the most liquid market in the world, with approximately $5.3 trillion worth of forex transactions processed each day. Euro (EUR) and New Zealand Dollar (NZD) is one of the most commonly traded currency pairs in the forex markets. With this in mind, this guide will go into detail about EURNZD and everything you need to know before trading this currency pair.
What is EURNZD? Overview
EUR/NZD represents the Euro - New Zealand Dollar currency pair, wherein Euro is the price currency, and the New Zealand dollar is the base currency. While EUR is the legal tender for all the countries in the Eurozone, NZD is the official currency used in New Zealand, the Cook Islands, the Ross Dependency, Niue, and the Pitcairn Islands. It is one of the most prominent currencies used in the South Pacific region.
For example, if the EUR/NZD exchange rate is 1.6571, then this means that one Euro can be exchanged for 1.6571 NZD. While EUR is undoubtedly one of the strongest and relatively stable currencies in the world, NZD displays substantial growth potential, as it serves as a proxy for Chinese growth. Due to the strong trade relations between China and New Zealand, the solid economic growth reported by China is usually reflected in NZD.
Reading the EURNZD chart can give you an idea about how the currency pair has performed in the past. Take a look at the EURNZD live chart here.
How to Read the EURNZD Chart
Reading the currency pair chart can help traders gauge the current EURNZD trend. Euro has depreciated against the New Zealand dollar over the past year. The strong Chinese economic growth and the impressive handling of the Covid-19 pandemic by New Zealand have allowed the NZD to outperform Euro over this period. EURNZD pip value has declined year-to-date. The currency pair has declined 2.45% year-to-date and 1.08% over the past three months.
However, amid rising concerns of the new Omicron Covid-19 variant grappling with the global economy, traders have shifted to relatively stable and highly liquid currencies. As a result, the EURNZD live price has gained 2.95% over the past five days.
EURNZD Historical Data
Euro is the second most commonly held currencies in the world and represents more than 21% of the global foreign currency reserves. As a result, the EURNZD correlation has historically remained greater than 1. During the initial stages of the pandemic in early 2020, EUR appreciated sharply against the NZ Dollar, as Euro is one of the most liquid currencies and is often considered a safe-haven investment in the forex markets.
However, the rapid global economic recovery and China's growth rate over the past one and a half years have allowed NZD to regain its luster steadily.
EURNZD Exchange Rate History
Euro is the second largest currency in the world, after US Dollar, and is one of the most liquid currencies in the market. Thus, EUR has always been stronger than the NZD. Despite the steady appreciation of the NZD, the EUR to NZD currency pair has gained 11.72% over the past five years, reflecting the strength of the Euro.
During the subprime crisis in 2008, Euro replaced US Dollar as the world's most valuable reserve currency, representing approximately 28% of the global foreign currency reserves. However, the decade-long economic boom since the financial crisis paved the way for other currencies such as the Canadian Dollar, Australian Dollar, and New Zealand Dollar to appreciate.
New Zealand's impressive economic growth fueled by the Chinese economic expansion has allowed NZ Dollar to appreciate over time. Euros to NZD have declined 22.71% over the past two decades, reflecting the strengthening NZD value.
EURNZD Exchange Rate Today
As a highly traded currency pair, EUR/NZD has a bid-ask spread of 0.0013. A trader selling the EUR to NZD derivative is asking for 1.6649, while a trader interested in buying the currency pair is willing to pay (bid) 1.6635. The difference between the bid and ask price reflects the cost of trading currencies. Usually, with heavily traded currency derivatives such as EURNZD, the bid-ask spread is very low.
What Influences EURNZD Exchange Rate?
The correlation of EURNZD is heavily affected by the following factors.
1. Stability in the Eurozone
Euro is the most commonly traded currency in the European Union. Thus, regional stability heavily influences the currency. The double-dip recession in the region has caused Euro to remain relatively weak over the past 18 months. Moreover, recent tensions amid the European Union and Belarusian government are expected to have a detrimental impact on Euro.
However, as one of the most valuable currencies globally, Euro is stronger than the New Zealand dollar. Moreover, during periods of uncertainty and economic slowdown, the demand for Euro rises, given a leading position in the forex markets.
2. New Zealand – China Trade Relations
China is the largest trading partner of New Zealand. Thus, the trade relationship between the two countries is a major factor influencing the NZ Dollar. It is a renowned carry trade currency and is a proxy for Chinese economic growth. To put it simply, a booming Chinese economy should result in the appreciation of NZD, which is also known as Kiwi. Despite the recent tensions in the Indo-Pacific region, the relation between the two countries has remained strong, boding well for the New Zealand dollar.
NZ Prime Minister has long advertised the country's mature relationship with China. However, the New Zealand government officials have recently hinted that it might cooperate AUKUS Defense agreement between Australia, the United States, and the United Kingdom, primarily targeting China. This is expected to create a wedge between New Zealand and China's trade relations.
3. Supply Chain Bottlenecks and Inflation
The rising demand for goods and services due to strong consumer spending has resulted in inflation levels hitting multi-year highs. However, port congestions and delays due to the pandemic have resulted in a severe supply chain disruption globally, inflating the price levels further. High inflation rates erode the value of a currency, thereby negatively impacting a currency derivative pair.
While the ECB has not announced any concrete plans to increase the benchmark interest rates, the Reserve Bank of New Zealand increased its official cash rate on November 24. Thus, barring adverse consequences of the new Delta variant, the NZD should appreciate in the near term.
EURNZD Forecast and Predictions
Analysts had previously predicted both Euro and NZ Dollar to appreciate in the upcoming months, given the strong global economic recovery and rising consumer spending. However, the renewed Covid-19 concerns following the discovery of the highly transmissible Omicron variant raise concerns regarding the EURNZD forecast accuracy.
The renewed lockdowns across the Eurozone, coupled with the brooding regional instability between European Union and Belarus, might cause Euro to fall in the near term. Moreover, the European Central Bank (ECB) has given no indication regarding the potential tightening of monetary policy, while the U.S. Federal Reserve has stated that it might adopt a hawkish stance if inflation continues to run high. The inflationary pressures might also cause EUR to depreciate. However, the increasing weakness of the US Dollar amid concerns regarding its debt ceiling might increase EUR's popularity as the global reserve currency.
On the other hand, the New Zealand dollar is poised to appreciate in the near term due to accelerated Chinese economic growth and its exceptional handling of the Covid-19 pandemic crisis. New Zealand's Prime Minister Jacinda Arden plans to ease travel restrictions despite the concerns regarding the Omicron variant. Instead, travelers would be required to quarantine for 14 days since their arrival on the island. Such policies should pave the way for the country's economic growth without triggering a domestic healthcare crisis. Thus, analysts expect the demand for NZD to grow over the short term.
Why Trade EURNZD Today?
1. Dual Benefits
Trading EURNZD currency pair gives you exposure to both the high growth currency NZD and relatively stable currency EUR. Depending on the market scenario and short-term predictions, investors can long or short the pair to maximize profit margins.
2. High Liquidity
The Euro to NZ Dollar is one of the most heavily traded currency derivatives in the market. As a result, multiple buyers and sellers are willing to trade the EUR/NZD pair. We see this reflected in its narrow bid-ask spread. With high liquidity and narrow spreads, EURNZD is one of the safest currency derivative pairs. Investors can buy or sell it anytime throughout the day during the weekdays.
3. Short term Investment Horizon
Forex trades typically have a short investment time frame, ranging from a few hours to a few days. Thus, the liquidity of a currency pair is vital. Due to the popularity of the EUR/NZD pair among retail investors and banks, and other financial institutions alike, any regional or international development is readily reflected in its value. Thus, traders only need to hold the currency pair for a short amount of time to capitalize on the latest market trends.
4. Rapid Global Economic Recovery
Countries adapted to the "new normal" pretty quickly following the onset of the healthcare crisis in early 2020. China has been the first country to recover completely from the pandemic-fueled recession to report positive GDP growth since the second quarter of 2020. Major developed and developing countries have since followed suit.
While the increasing cases of the Omicron Covid-19 variant are concerning, the virus will most likely have a transitory impact on the global economy. Thus, trading the EURNZD can help investors capitalize on the global economic recovery.
Where Can I Invest in the EURNZD Pair?
You can trade Euros to NZD through various currency brokers and contracts for difference (CFD) platforms. The broker ZFX is ideal for trading the currency pair. Indeed, it charges minimal trading and conversion fees.
The London-based platform focuses on "sourcing the best prices in the institutional marketplace using cutting edge technology and providing best in class trading services," thereby making it ideal for trading not only forex but also commodity derivatives and cryptocurrencies. Also, the ZFX platform is compliant with all the international news and regulations required to facilitate currency trades globally.
How to Trade EURNZD Now
Trading the EURNZD has never been easier. In order to trade through the ZFX platform, you have to follow the next step.
1. Open a ZFX Account
You need to open a trading account with ZFX by submitting your basic information such as name, mobile number, and email. ZFX offers three types of trading accounts – Mini Trading Account, Standard STP Trading Account, and ECN Trading Account. Depending on your preference, you can open any of the following accounts and set up your account and create a password by using the code sent to your registered mobile number.
2. Make your First Deposit
Depositing funds into your account is the next step. You can begin your trading journey for as low as $50 if you choose a Mini trading account. For Standard STP Trading Account, you need a minimum $200 initial investment, whereas the minimum requirement for ECN Trading Account is $1000.
3. Verify your Account
After depositing the requisite funds, you can now verify your ZFX account. Post document verification of your national ID license, passport or driver's license, and bank statement. Then, you will have activated your account.
4. Start Trading EURNZD
After opening the ZFX account, download the MT4 trading tool from ZFX to begin trading EUR/NZD.
Tips for EURNZD Beginner Traders
- Beginner forex traders should keep in mind that the forex markets are open 24 hours a day during the weekdays, unlike the stock markets, which are operational for only a few hours each day.
- Moreover, the best hours trading EURNZD are following the key financial news releases.
- Although retail trades form only a tiny fragment of the average daily trades placed in the forex markets, it is one of the most profitable investment avenues.
- Though trading currency pairs for the first time can seem daunting, tracking the performance of some of the most common currencies can help traders comprehend the EURNZD relationship, as well as the perfect entry/exit points.
Bottom Line: Is EURNZD a Good Investment Now?
Amid the surging market volatility, the EURNZD value is expected to rise as the EUR appreciates due to the rising demand for safe-haven investment bets. However, analysts expect NZD to perform well over the long term, as the currency should benefit from the internal macroeconomic growth and strengthening trade relations.
However, note that NZD has been losing value lately due to the supply chain barriers maintaining pressure on the currency. Thus, traders should avoid this pair until the international trade relations stabilize. Tracking the EURNZD news should allow them to identify the perfect time for investing in the currency pair.