Monday February 24th
10:45am NZD Retail Sales q/q
Forecast 0.50% Previous -0.10%
All Day JPY Bank Holiday
10:00pm EUR German ifo Business Climate
Forecast 85.9 Previous 85.1
Wednesday February 26th
3:00am USD S&P/CS Composite-20 HPI y/y
Forecast 4.30% Previous 4.30%
4:00am USD CB Consumer Confidence
Forecast 103.3 Previous 104.1
4:00am USD Richmond Manufacturing Index
Forecast -2 Previous -4
1:30pm AUD CPI y/y
Forecast 2.60% Previous 2.50% Read more
The RBA cut interest rates Tuesday by 25 points to 4.10% from 4.35%, the first time the central bank has cut rates since October 2020. The review was hawkish as markets were expecting from Governor Bullock suggesting progress has been made with inflation, but they have a way to go, the bank pencilling just 2 further cuts to 3.6% this year. The cross travelling from 0.8985 (1.1130) post the news to 0.8950 (1.1170). The RBNZ also cut rates 50 points as widely predicted following the RBA Wednesday 50 points to 3.75% but was dovish in comparison on future economic prospects. The NZD clawing back losses to 0.9025 (1.1080) into Friday. Bumper Aussie employment data just out with unemployment remaining at 4.1% and net employment rising 44,000 in January has buyers back into AUD with price moving back to 0.9000 (1.1110)
The current interbank midrate is: NZDAUD 0.9000 AUDNZD 1.1102
The interbank range this week has been: NZDAUD 08950- 0.9035 AUDNZD 1.1068- 1.1173
The Australian Dollar (AUD) moved to 0.6400 Friday against the US Dollar (USD) a two-month high after a surge north from 0.6330 early Thursday and improved risk sentiment around the Ukraine/Russia peace deal. Aussie employment data came in strong casting questions over future rate cuts. The RBA will remain cautious over future policy easing declaring the battle against inflation is not over. US manufacturing for January prints tonight and should reflect a strong strengthening sector.
The current interbank midrate is: AUDUSD 0.6398
The interbank range this week has been: AUDUSD 0.6326- 0.6408
The Reserve bank of New Zealand (RBNZ) cut the key interest rate by 50 points Wednesday from 4.25% to 3.75% as predicted. This was the fourth time in a row they have dropped it. The central bank is now forecasting a drop to 3.00% in 2025, we predict 50 of this will come at the April policy meeting with the economy still spluttering. US Dollar weakness came into play midweek with tariff talks and a “risk on” tone after positive developments in the Russia/Ukraine peace talks. At 0.5760 into Friday up from the midweek low of 0.5675 we expect further topside moves by the kiwi could be overdone.
The current interbank midrate is: NZDUSD 0.5759
The interbank range this week has been: NZDUSD 0.5677- 0.5771
The Australian Dollar (AUD) extended its recovery north Monday against the US Dollar (USD) reaching 0.6370 into early Tuesday a fresh yearly high in the cross. A combination of factors has contributed to the upbeat AUD of late including sentiment around a Ukraine/Russia peace deal and softer US Retail Sales. All eyes are on today’s RBA with predictions of a 25-point cut to 4.10%, however there are mounting risks the central bank delivers a hawkish surprise amid a tighter labour market and inflated CPI. Signalling a shallow rate cut cycle in 2025 could also be on the cards. Setback for the AUD should be well supported.
Current Level: 0.6352
Resistance: 0.6400
Support: 0.6170
Last Weeks Range: 0.6234- 0.6366
The Australian Dollar (AUD) extended gains off Monday’s open against the Euro (EUR) to 0.6080 (1.6445) before dropping back to 0.6065 (1.6490) into the early Tuesday session. The Euro has been feeling better about a potential peace deal between Ukraine and Russia. This morning moves however have markets repositioning for an RBA cut later today. The central bank should cut 25 points to 4.10%, but this is not a given with overnight speculation the RBA could “hold” a while with mounting stubborn inflation and strong employment growth.
Current Level: 1.6507
Resistance: 1.6770
Support: 1.6400
Last Weeks Range: 1.6392- 1.6632
The Australian Dollar (AUD) extended gains off Monday’s open against the Euro (EUR) to 0.6080 (1.6445) before dropping back to 0.6065 (1.6490) into the early Tuesday session. The Euro has been feeling better about a potential peace deal between Ukraine and Russia. This morning moves however have markets repositioning for an RBA cut later today. The central bank should cut 25 points to 4.10%, but this is not a given with overnight speculation the RBA could “hold” a while with mounting stubborn inflation and strong employment growth.
Current Level: 0.6058
Resistance: 0.6100
Support: 0.5965
Last Weeks Range: 0.6012- 0.6100
The Australian Dollar (AUD), British Pound (GBP) cross has a busy calendar this week led by the RBA cash rate and statement later today. This is followed by Aussie jobs numbers Thursday and UK Retail Sales Friday. The RBA is expected to cut interest rates from 4.35% to 4.10% in what could be a hawkish read with the central bank possibly considering no cut this time around at all. Consensus is that with a tight labour market, stubborn CPI governor Bullock could signal a shallower rate cut cycle for 2025. Also of note is UK inflation y/y with forecasts this could come in around 2.8% in January up from 2.5% which could send the GBP rallying.
Current Level: 1.9872
Resistance: 2.0000
Support: 1.9615
Last Weeks Range: 1.9638- 1.9943
The Australian Dollar (AUD), British Pound (GBP) cross has a busy calendar this week led by the RBA cash rate and statement later today. This is followed by Aussie jobs numbers Thursday and UK Retail Sales Friday. The RBA is expected to cut interest rates from 4.35% to 4.10% in what could be a hawkish read with the central bank possibly considering no cut this time around at all. Consensus is that with a tight labour market, stubborn CPI governor Bullock could signal a shallower rate cut cycle for 2025. Also of note is UK inflation y/y with forecasts this could come in around 2.8% in January up from 2.5% which could send the GBP rallying.
Current Level: 0.5032
Support: 0.5000
Resistance: 0.5100
Last week’s range: 0.5014- 0.5092
The New Zealand Dollar (NZD) improved off 0.5410 (1.8490) late in the week to close around the 0.5465 (1.8300) level as risk markets came back online. Early Monday we saw the kiwi extend to 0.5480 (1.8250) however it’s been unable to maintain around this level falling to 0.5470 (1.8280). Eurozone GDP was well received coming in at 0.1% after 0.0% was forecast. ECB’s Panetta believes the ECB should be cutting 75 points over the next 12 months in line with downward pressures on inflation. Tomorrow’s RBNZ policy announcement should cut rates by 50 points potentially with a dovish statement. This could put pressure on the NZD this week.
Current Level: 1.8298
Resistance: 1.8530
Support: 1.8230
Last Weeks Range: 1.8207 – 1.8493