The EUR/NZD currency pair settled above recent low of 1.8835, its weakest level since May 14th, in the wake of the RBNZ’s policy decision and as market players digested a flurry of European macro data.
In Germany, retail sales shrank 1.1% in April, recording the first decline in four months, against expectations of a 0.2% growth.
At the same time, easing inflation pressures in Euro Area’s largest economies prompted investors to boost their bets the European Central Bank will lower interest rates at its upcoming policy meeting and likely deliver more cuts afterwards.
In France, annual consumer inflation dropped to 0.7% in May, preliminary data showed, or the lowest rate since February 2021.
In Spain, annual CPI inflation eased to 1.9% in May, or the lowest rate since October 2024.
In Italy, annual CPI inflation eased to 1.7% in May, the lowest rate since February.
And, German annual CPI inflation remained stable at 2.1% in May, or the lowest rate since October 2024.
Investors also weighed news that a US federal appeals court issued a temporary halt to a recent tariff ban on the Trump administration’s tariff policies.
Meanwhile, the Reserve Bank of New Zealand cut its official cash rate by 25 basis points to 3.25% at its May meeting, in line with market consensus.
This way, borrowing costs were brought to their lowest level since August 2022. The rate adjustment came with signals that a more extensive monetary easing cycle may unfold.
The RBNZ monetary policy committee cited elevated commodity prices and easing interest rates as supportive forces for New Zealand’s economic momentum. Despite this, the central bank flagged risks ahead that could hamper recovery.
The EUR/NZD currency pair settled 0.14% lower at 1.9004 on Friday.
The minor Forex pair gained 0.16% for the week.
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