Standard Bank advises shorting the euro against the New Zealand dollar.

Steven Barrow, Foreign Exchange Strategy Director of the G10 Group, wrote in a research report: The Reserve Bank of New Zealand still has continuing interest rate hike momentum, while the tightening cycle of the European Central Bank may slow down. Standard Bank suggests investors to position themselves short on the Euro against the New Zealand Dollar. Barrow recommends establishing a short Euro against the New Zealand Dollar position at 2.0080, with a stop loss set at 2.07. The bank also believes that there will be a divergence in interest rate trends between the Reserve Bank of Australia and the Reserve Bank of New Zealand, and recommends shorting the Australian Dollar against the New Zealand Dollar at 1.2140, with a stop loss at 1.24. This week, as inflation data from various countries is released and progress is made in Middle East peace negotiations, European Central Bank officials have softened their tone from the previous hawkish interest rate hike rhetoric. European Central Bank officials expressed a relatively optimistic view on the European economic outlook at the Sintra Annual Symposium, making it difficult for market traders to judge the central bank's next policy move. Pricing in the interest rate swap market shows that the market expects a cumulative 23 basis points rate hike by December, down from a high of 27 basis points on Monday. Some banks predict that the Euro may fall to 1.10 against the US Dollar next year. Just a few months ago, the situation was quite the opposite, as the Euro briefly rose above 1.20 against the US Dollar, hitting a near five-year high, and European policymakers were concerned about the currency being too strong.