Euro / New Zealand - EUR/NZD

Like the Australian Dollar, the New Zealand Dollar (NZD) is a currency that is strongly linked with the raw material exchange rates (farms one in particular); raw material represent 40% of the New Zealand exports.

At the beginning of the XXIst century, the high key interest rate policy run by the New Zealand Central Bank widely made the investors do “carry trade” operations (purchases of NZD with other currencies borrowed with low interest rates, in particular dollars but also Euros) that encouraged the re-appreciation of New Zealand dollar.

With the decrease of the key interest rates of all the great central banks, but also the decrease of the raw material exchange rates (from 2007) or the world stock-exchange crisis (2007-2008), the previous structural data have changed.

With a listing EUR/NZD = 2.2925 in September 2001, the EUR/NZD exchange rate decreases (with some bullish moments: EUR/NZD = 1.9158 on June, 4th 2002, EUR/NZD = 2.1415 on August, 7th of the same year) until a lower point of 1.6406 reached in December 2005.

So the New Zealand Dollar appreciates against Euro as against the American Dollar, but whereas the rise of the NZD against the NZD will be continuous until 2008, the NZD will lose ground against the Euro during the first semester of 2006, as the EUR/NZD cross went from an exchange value of 1.6406 on December 2005 to a value of 2.1122 on June, 28th 2006.

Then the bearish movement of the EUR/NZD cross “normally” takes over (with the important rise of the raw materials) until EUR/NZD = 1.7072 reached in July 2007.

With an anticipation of nearly a year on the reversal of trend of the fluctuations of the NZD/USD cross, the EUR/NZD cross has began since the Summer of 2007, a bullish movement that accelerates from February 2008 (EUR/NZD = 1.8412 on February, 22nd 2008) to reach the higher of EUR/NZD = 2.5535 on February, 2nd 2009.

From March 2009, and this time in parallel with the fluctuations of the NZD in relation with the dollar, the EUR/NZD cross will quickly lose ground and the New Zealand Dollar increases in value until a value EUR/NZD = 1.9872 in October 2009, so a 25% decrease in six months, a decrease that could have been more important if the Euro hadn’t clearly increased in value against the Dollar during the same period.