The Australian Cash Rate remained unchanged at 4.35% Tuesday rallying the British Pound (GBP) to 0.5190 (1.9270) post the release, the RBA saying they still see room to hike at a later date if inflation and jobs data print particularly poor. The board saying bringing back inflation to the target range of 2-3% was looking like taking longer than anticipated. Aussie GDP q/q printed at 0.2% vs 0.5% forecast Wednesday sending the Aussie lower to 0.5200 (1.9220) briefly before reversing again to clock 0.5250 (1.9050) early this morning. Next week’s Bank of England cash rate release is insight with predictions the central bank will retain their stance at 5.25% and unwind some of the recent rhetoric around “higher for longer”.
The current interbank midrate is: AUDGBP 0.5238 GBPAUD 1.9091
The interbank range this week has been: AUDGBP 0.5190- 0.5271 GBPAUD 1.8970- 1.9266
The Australian Dollar (AUD) took on water for most of the week against the US Dollar (USD) dropping from 0.6680 levels to 0.6525 yesterday. Most of the downside was off the back of poor Aussie GDP, figures showing only a 0.2% rise in the third quarter after 0.5% was predicted. Household consumption has slowed over recent quarters and shows the fallout of higher interest rates on spending. Overnight equity markets have improved, the Nasdaq is up over 1.2% which has helped the AUD back over 0.6600. Non-Farm Payrolls print tomorrow, pushing through 0.6680 will be tough.
The current interbank midrate is: AUDUSD 0.6595
The interbank range this week has been: AUDUSD 0.6525- 0.6690
The New Zealand Dollar (NZD) has bounced back from 0.4855 (2.0590) early in the week against the British Pound (GBP) to reach 0.4910 (2.0360) this morning in light trade. UK PMI data saw a downtick of output for the third consecutive quarter in November led by a fall in residential buildings putting pressure on the GBP post release. Markets are starting to price in rate cuts – 3 by the end of 2024 depending on how inflation performs. Next week we have NZ 3rd quarter GDP before the Bank of England’s cash rate announcement.
The current interbank midrate is: NZDGBP 0.4896 GBPNZD 2.0424
The interbank range this week has been: NZDGBP 0.4856- 0.4911 GBPNZD 2.0361- 2.0592
Risk assets this week have dragged on the New Zealand Dollar (NZD) the currency falling back to 0.6115 against the US Dollar (USD) on renewed greenback demand. Central banks around the globe are starting to talk more about easing policy and dropping rates sooner rather than later. The recent rhetoric around “higher for longer” is now being questioned with the first rate cut now predicted by the RBNZ by August 2024. Non-Farm Payroll prints tonight expected to come in light with unemployment to tick higher from 3.9%. Technically the kiwi looks well capped at 0.6220 and should continue to the downside. A December close below 0.6050 should signal further bearish price moves.
The current interbank midrate is: NZDUSD 0.6162
The interbank range this week has been: NZDUSD 0.6113- 0.6222
The New Zealand Dollar (NZD) extended moves north into Friday against the Australian Dollar (AUD) clocking 0.9390 (1.0650) an 8-week high. The RBA left rates unchanged at 4.35% Tuesday as widely predicted after the central bank hiked in November. New governor Michelle Bullock saying progress to bring down inflation to their target 2-3% band has been slower than forecast. The RBA have no meeting planned in January; we would not expect a further hike at February’s meeting if 4th quarter inflation prints considerably lower than the current 5.4% in late January. Prices in the pair are back around the 0.9345 (1.0700) zone with a little Aussie support in play.
The current interbank midrate is: NZDAUD 0.9339 AUDNZD 1.0699
The interbank range this week has been: NZDAUD 0.9287- 0.9384 AUDNZD 1.0656- 1.0767
The New Zealand Dollar (NZD) has extended moves higher against the British Pound (GBP) Monday reaching 0.4900 (2.0400) before drifting back to 0.4885 (2.0470) this morning. UK house prices rose further than expected while UK manufacturing also came in hot, both strengthening the Pound for short periods. Governor Bailey speaks Thursday. On the chart the kiwi eyes 0.4930 (2.0285) the high of early October, the kiwi should be well supported on dips in the run up.
The current interbank midrate is: NZDGBP 0.4877 GBPNZD 2.0504
The interbank range this week has been: NZDGBP 0.4874- 0.4904 GBPNZD 2.0388- 2.0515
The Australian Dollar (AUD) rallied late Friday against the US Dollar (USD) reaching 0.6670 areas as risk markets continued to dominate moves based on impressive equities and metal prices. The surge to early August highs hasn’t lasted however with US Manufacturing contracting in November coming in at 46.7% worse than market expectations of 47.6% bringing back the AUD to Tuesday. Today’s RBA cash rate will remain unchanged at 4.35% but may signal ongoing attention to stubborn inflation, PMI and Retail Sales data. 3rd quarter data and inflation will be key to February’s policy meeting. Non-Farm Payroll prints Friday and is expected to reflect a rise to unemployment numbers.
The current interbank midrate is: AUDUSD 0.6620
The interbank range this week has been: AUDUSD 0.6603- 0.6690
The Australian Dollar (AUD), British Pound (GBP) sits deep within recent ranges into Tuesday, falling back to 0.5240 (1.9080) off the open as markets await today’s RBA cash rate release. The Reserve Bank of Australia will keep their cash rate on hold later today at 4.35% with Governor Bullock remaining on alert about lingering inflation. She said recently these problems are localised not global. With recent PMI data showing a slowdown in the economy this should be reflected in the 3rd quarter data and 4th quarter CPI. We expect the Aussie to drift lower over the week.
The current interbank midrate is: AUDGBP 0.5240 GBPAUD 1.9083
The interbank range this week has been: AUDGBP 0.5238- 0.5271 GBPAUD 1.8971- 1.9090
The New Zealand Dollar (NZD) reached the lofty heights of 0.6210 to close out the week against the US Dollar (USD) the highest it’s been since late July. It’s been an incredible run through 0.6000 recently in a perfect storm with massive flows back into the kiwi. A hawkish RBNZ last week helped when the central bank signalled they would keep interest rates higher for a longer period. ANZ consumer confidence rose 3.8 points in November to 91.9- the highest level since January 2022. We have no local data publishing on this week’s docket, just US Non-Farm Payroll Friday, expected to come in poor with unemployment rising from 3.9%. The kiwi could be a little overbought- we see the NZD drifting lower over the coming days.
The current interbank midrate is: NZDUSD 0.6161
The interbank range this week has been: NZDUSD 0.6149- 0.6221
The Australian Dollar (AUD) retreated Monday off 1.0760 (0.9295) to 1.0730 (0.9320) early Tuesday as we head into RBA week. The kiwi has been doing well of late post last week’s RBNZ hawkish hold. We don’t expect a hike from the RBA today from 4.35% after the central bank raised it in November. The Aussie could come under selling pressure this week depending on the market mood. A break past 0.9340 (1.0710) and we could see further upside in the NZD, possibly a retest of the long-term mark at 0.9400.
The current interbank midrate is: NZDAUD 0.9307 AUDNZD 1.0736
The interbank range this week has been: NZDAUD 0.9289- 0.9335 AUDNZD 1.0712- 1.0765