Eurozone growth downgraded to -0.3% for the year ahead from +0.5% previously

Eurozone growth downgraded to -0.3% for the year ahead from +0.5% previously

By Kymberly Martin


The NZD/USD was on a general uptrend yesterday afternoon. Overnight it consolidated above 0.8320.

The USD was broadly weaker overnight, though there was little clear market direction. The Euro Stoxx50 closed down 0.40% and the S&P500 is currently up 0.20%.

The NZD/USD continues to trade very comfortably in the range it has established since the start of the month, between 0.8250 and 0.8430. We see little to test either side of this range today in the absence of any NZ data releases.

The NZD/AUD was fairly range-bound overnight, trading around 0.7800 currently. Trading versus its European peers was a bit choppier. The NZD/EUR touched above 0.6280 early this morning before falling off to trade around 0.6240 currently. Once again, the NZD appears to be in a broad pattern of consolidation since the start of the month, on this cross.

With no NZ data releases today, the currency will be at the whim of global developments. On the cross, look out for RBA Governor Stevens appearance before the House Economic Committee at 11.30am (NZ time). We continue to see support for the NZD/USD at 0.8260, with resistance eyed at 0.8360.


The USD was broadly weaker over the past 24-hours. The EUR was temporarily boosted by a stronger-than-expected IFO release.

The EUR that had been drifting up in the early part of the evening got a boost last night after German IFO data surprised positively. The data showed the headline business climate survey moved up to 109.6 (108.8 expected). The forward-looking expectations component moved up to 102.3 (102.0 expected), from 100.9 previously. The EUR/USD moved up to above 1.3340. However, the EUR struggled to hold onto its gains.

A European Commission report showed it had downgraded its expectations for Eurozone growth to -0.3% for the year ahead, from 0.5% previously. Further downgrades will likely follow. The EUR/USD trickled off and trades around 1.3320 currently.

The USD index drifted fell to below 78.80 after the release of the IFO data. However, it clawed back some of its losses to trade around 78.90 currently. Data showed US house prices rose 0.7%m/m in December (0.1% expected).

The GBP/USD rode on the EUR’s coat-tails. It touched a high above 1.5730 early this morning, before subsiding to trade around 1.5700 currently.

The USD/JPY traded in a choppy range overnight, trading near the bottom of the range, at 80.10, currently. The USD/JPY appears to be taking a small breath after its rapid ascent from around 76.00 at the start of the month.

The AUD was on a gradual uptrend most of yesterday afternoon. It consolidated its gains overnight, currently trading at 1.0680. Support continues to be eyed at the 1.0600 level. There are no AU data releases today However, eyes will be on AU politics where PM Gillard has called a leadership vote for next Monday, in attempt to quell rumblings abut who should lead the country.

The day ahead will be dominated by central bank speak and GDP releases. RBA governor Stevens speaks today at the House Economic Committee. At least four US Federal Reserve officials speak tonight. UK and German GDP data will be released. We also get the US University of Michigan consumer sentiment survey.

All its research is available here.

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