The EUR saw gains as its funding currency unwound with the JPY and the CHF on the risk off tones after the US thanksgiving. A funding currency is a cheap currency that you pair with high betas (like the NZD). So, the EUR gained on that. BUT the eurozone has surging cases. The services PMI have missed on greater COVID restrictions and this looks set to continue. The ECB meet in a few hours and they will almost certainly be dovish. More eur falls look highly likely.
The NZD is expected to gain on the RBNZ projecting rate hikes to 2.6% by the end of 2023. With the major Omicron fears fading AND the Fed now not spooking markets the NZD can see some more gains as the risk on tones now support the NZD.
So, watch for EURNZD selling medium term. Stops above major swings and targets major support below.
