- EUR/NZD has been consolidating over the past few weeks. The euro remains stronger against the U.S. dollar this year, as does the New Zealand dollar.
- However, while EUR has found appeal as an even closer competitor to USD (as a world reserve currency), NZD is exposed to plenty of risks.
- Tourism is a significant component of NZ GDP and employment. As a second wave of COVID-19 drags on, the NZ economy is likely to struggle.
- Further, a OECD PPP model and a separate real yield calculation both support a stronger EUR/NZD exchange rate.
For further details see:
EUR/NZD Could Strengthen On The Back Of COVID-19 Risks And A Stronger Real Yield