Monday Apr 10
All Day NZD Bank Holiday
All Day AUD Bank Holiday
All Day GBP Bank Holiday
All Day EUR French Bank Holiday
All Day EUR German Bank Holiday
All Day EUR Italian Bank Holiday
Wednesday Apr 12
10:00am USD FOMC Member Harker Speaks Read more
The Australian Dollar (AUD) dropped to its lowest level in 20 months this morning against the Euro (EUR) as the RBA held interest rates unchanged yesterday. The Australian central bank decided it was time to pause hiking to assess the economic outlook amid considerable uncertainty. This is to say they have not ruled out more rises if required. RBA’s Lowe said they remain resolute in their determination to bring down inflation to their target band. Also of note is the opinion of the RBA that inflation may have peaked. We won’t know until Q1 is published at the end of this month. With Easter break looming it should be a slow finish to the week. Downside pressures remain for the AUD.
Current Level: 0.6165 (1.6220)
Resistance: 0.6290 (1.6400)
Support: 0.6100 (1.5900)
Last Weeks Range: 0.6130-0.6195 (1.6142-1.6312)
The RBA paused its hiking run yesterday leaving the cash rate at 3.6%. This is the first time in 11 meetings going back to May last year the RBA have held policy steady. The decision was mostly “priced in” although we did see prices in the Australian Dollar (AUD), British Pound (GBP) fall lower to 0.5390 (1.8560) from 0.5455 (1.8330) levels post the release. A Feb 2022 low. Leading into Easter holidays there is not a lot on the calendar to come, we see more of the same and the AUD to stay under pressure.
Current Level: 0.5405 (1.8501)
Resistance: 0.5490 (1.9100)
Support: 0.5235 (1.8220)
Last Weeks Range: 0.5394-0.5449 (1.8351-1.8537)
The Australian Dollar improved Monday coming off 0.6630 levels against the US Dollar (USD) reaching 0.6720 into Friday as risk flows corrected. Last week the Fed raised its cash rate to 5.0% from 4.75% as predicted but notably confirmed they would keep their tightening policy in place for at least one more hike. Although y/y CPI came off 6.4% to 6.0% recently, the Fed still feels the need to keep with the current pace. Despite weaker Aussie Retail Sales and CPI- 6.8% vs 7.2% y/y printing the RBA should still look to hike at their next meeting. The AUD many struggle to push past 0.6800 on the upside over the coming days.
Current Level: 0.6759
Resistance: 0.6860
Support: 0.6570
Last Weeks Range: 0.6632-0.6737
The New Zealand Dollar (NZD) looked good early in the week climbing to 0.5795 (1.7260) against the Euro (EUR) but has since given back gains. The Euro helped recently by German CPI which came in above forecast at 7.4% y/y but down from 8.7%. The ECB are focusing on big picture views and remain staunch on achieving their 2.0% inflation target. Eurozone bank deposits are still healthy following the recent closures of US banks, ECB’s Schnabel saying confidence in the banking sector is solid. The news was also positive for the Euro. This afternoon’s RBNZ cash rate increase to 5.25% from 4.75% surprised markets moving the pair to 0.5825 (1.7170) post release with the RBNZ clearly overly panicked by high inflation. We would need to see a price shift through 0.5920 (1.6900) to indicate a trend reverse.
Current Level: 0.5789 (1.7274)
Resistance: 0.5815 (1.7500)
Support: 0.5715 (1.7200)
Last Weeks Range: 0.5717 -0.5787 (1.7280-1.7490)
The New Zealand Dollar (NZD) traded higher Monday to 0.5085 (1.9670) but was unable to hold here giving back gains to the British Pound (GBP) with the pair clocking a new low at 0.5030 (1.9870) yesterday an October 2022 low. Bank of England hawkish comments from Mann recently have boosted the GBP with core inflation “still very sticky” and heading higher. The probability of a hike at the BoE next meeting on May 12 are high for a 25 point rise to 4.5%. This afternoon’s RBNZ cash rate release saw a rise to 5.25% or 50 points, more than the 25 points predicted. Action over the release sending the NZDGBP to 0.5110 (1.9570). Long Term we expect the bear trend in the cross to continue.
Current Level: 0.5078 (1.9692)
Resistance: 0.5150 (0.2000)
Support: 0.5000 (1.9430)
Last Weeks Range: 0.5041-0.5085 (1.9665-1.9835)
Sideways action continued in the New Zealand Dollar (NZD), Australian Dollar (AUD) cross this week ranging between 0.9260 (1.0800) and 0.9365 (1.0680). Yesterday’s RBA cash rate release softened the Aussie after the central bank kept rates on hold at 3.60% the news shifting the pair from 0.9285 (1.0770) to 0.9345 (1.0700) over the following hours. On the chart we see massive long term resistance at 0.9400 (1.0640), the pair having posted moves in the 0.94’s this year. Today’s RBNZ cash rate announcement should give the kiwi more upside bias when they are widely predicted to hike to 5.00% from 4.75%. Post RBNZ update- The RBNZ has raised rates a surprise 50 points to 5.25% sending the cross to 0.9400 style levels. The RBNZ citing inflationary pressures as their main reason.
Current Level: 0.9384 (1.0650)
Resistance: 0.9390 (1.0800)
Support: 0.9260 (1.0650)
Last Weeks Range: 0.9291-0.9372 (1.0670-1.0762)
The New Zealand Dollar (NZD) extended gains against the US Dollar (USD) Monday after initially falling to 0.6200 levels. The kiwi has been bid solid over the last 2 days to post a fresh high of 0.6320 this morning, a 7-week high. Equity markets have been buoyant since early March as well as rallying commodities offering upside momentum for the kiwi. US Manufacturing data printed poor this morning at 46.3 vs 47.5 forecast not helping the greenback. The RBNZ hiked rates just a few minutes ago to 5.25%- this was not expected, sending the NZD north to 0.6370 areas. The central bank says they are committed to lowering inflation back to a 1-3% band. Risky business rising rates hard on the brink of a recession. We said last week we expected the kiwi to retest 0.6400 levels, this is still our order of play and beyond.
Current Level: 0.6349
Resistance: 0.6500
Support: 0.6170
Last Weeks Range: 0.617-0.6296
Market Overview
Key Points:
• Ex President Trump pleads not guilty to 34 felony counts
• The RBA left interest rates unchanged yesterday as predicted to give the central bank more time to read the state of the economy.
• US manufacturing orders dropped to its lowest level since May 2020, the index falling from 47.7 to 46.3.
• Gold has jumped over 20% since the low of October 2022, climbing to 2020 per ounce this morning the highest level since March 2022
• ECB’s Makhlouf says monetary policy will need to be kept at a restrictive level to dampen demand. The ECB is pricing in a 50 point hike to 3.5% at the May 5th release.
• Bank of Tokyo’s Tenreyro still believes the BoJ needs to hike rates in order to meet inflation targets.
• Russia’s foreign minister Lavrov says the “west” is trying to drive a wedge between Russia and Chinese political relationships.
• The British Pound (GBP) was the strongest currency in March with the Australian Dollar (AUD) and the US Dollar (USD the worst performers. Read more
Sunday April 2nd
2:00am NZD Daylight Saving Time Shift
4:00am AUD Daylight Saving Time Shift
Monday April 3rd
All Day CNY Bank Holiday
Tuesday April 4th
2:00am USD ISM Manufacturing PMI
Forecast 47.5
Previous 47.7
Tentative CNY Bank Holiday
4:30pm AUD Cash Rate
Forecast 3.85%
Previous 3.60%
4:30pm AUD RBA Rate Statement Read more