FX News

The New Zealand Dollar (NZD), British Pound (GBP) has consolidated around the 0.5170 (1.9350) area over the past few days with pressure on the Pound evident. This week’s fiscal plan docket will be announced Thursday by Chancellor Jeremy Hunt which will unveil a slew of tax increases and budget cuts. Making this difficult is a widening gap of consumer cost of living and recession issues as the economy worsens. We think with the recent RBNZ rhetoric and inflation pressures the kiwi may retest the 0.5265 (1.9000) region this week.

Current Level: 0.5178 (1.9312)
Resistance: 0.5235 (1.9500)
Support: 0.5130 (1.9100)
Last Weeks Range: 0.5123-0.5226 (1.9134-1.9517)

Range trading in the New Zealand Dollar (NZD), Australian Dollar (AUD) has the cross bouncing around 0.9090 (1.10) areas this morning. Movement over the following few days could be mild as markets await next week’s RBNZ cash rate release. Aussie jobs data could give us volatility in the cross Thursday if the data prints outside 3.5% and 15,000 predicted, also of note are rising metal prices which could further support the AUD.

Current Level: 0.9094 (1.0986)
Resistance: 0.9140 (1.1170)
Support: 0.8950 (1.0940)
Last Weeks Range: 0.9055-0.9192 (1.0878-0.1.1043)

The US Dollar Index has taken a pounding over the past few weeks falling 6% as the Fed continues with their extremely hawkish monetary policy stance. Equity markets rose overnight pushing up risk products, the kiwi reaching a fresh high of 0.6120 against the US Dollar (USD). Price action into Tuesday suggests the market could still be overreacting to last week’s softer US CPI data, the question is will the kiwi rally hold up, currently trading at a 9-week high. US Retail Sales is expected to be a bumper result printing Thursday. Topside resistance is 0.6160.

Current Level: 0.6094
Resistance: 0.6160
Support: 0.5980
Last Weeks Range: 0.5838-0.6122

Tuesday 15/11
1:30pm, AUD, Monetary Policy Meeting Minutes
8:00pm, GBP, Claimant Count Change
Forecast: 17.3K
Previous: 25.5K

Wednesday 16/11
2:30am, USD, Empire State Manufacturing Index
Forecast: -5
Previous: -9.1
2:30am, USD, PPI m/m
Forecast: 0.50%
Previous: 0.40%
1:30pm, AUD, Wage Price Index q/q
Forecast: 0.90%
Previous: 0.70%
8:00pm, GBP, CPI y/y
Forecast: 10.50%
Previous: 10.10% Read more

The Euro (EUR) continues to push higher against the Australian Dollar (AUD) reaching 1.5580 (0.6420) early this morning off 1.5400 (0.6495) levels as the currency benefits from a hawkish ECB tone. ECB’s Nagel was on the wires saying the ECB would continue to raise interest rates even at the detriment of growth and economic health. The Eurozone economy is predicted to shrink over the winter months from a combination of higher heating/energy costs and poor global demand and high borrowing costs. An EU economic forecast is due this Friday which will give us a look at the next 2 years of variables. A retest of the long term low at 0.6385 (1.5660) looks likely over the coming days.

Current Level: 0.6413 (1.5593)
Resistance: 0.6515 (1.5700)
Support: 0.6370 (1.5347)
Last Weeks Range: 0.6427-0.6547 (1.5270-1.5558)

Recession fears in the UK have dampened buying of British Pound (GBP) in recent days after an early week surge to 0.5620 (1.7800) its back around 0.5680 (1.7600) levels this morning. JP Morgan have predicted post a recession this would leave the economy 10% lighter than pre covid times. A very significant shift which will impact UK consumers bigtime as the cost of living rises over the following 1-2 years. A lack of tier 1 data early in the week has left the cross subjected to “risk” moves. Key data Friday is UK GDP m/m which will print in the negative – just a question of how bad. Also, the UK fiscal plan which could support the GBP.

Current Level: 0.5652 (1.7692)
Resistance: 0.5750 (1.8200)
Support: 0.5500 (1.7400)
Last Weeks Range: 0.5517-0.5720 (1.7482-1.8123)

The Australian Dollar continued its run north early week to 0.6545 against the US Dollar (USD) before slipping back as equity markets turned red. As markets digest the midterm election results in the US the Aussie fell back on speculation the Republicans are set to take over the “house” while the outcome for the senate is still being counted. US CPI prints tonight with expectations inflation may actually cool a tad y/y from 8.2%. The Fed won’t let inflation get away from them so will target another 75-point hike next month. Risk off may continue as the election draws to a result, the Aussie may drift lower.

Current Level: 0.6421
Resistance: 0.6680
Support: 0.6180
Last Weeks Range: 0.6272-0.6490

After 4 weeks of solid momentum for the New Zealand Dollar (NZD) as it climbed to 0.6000 (1.6680) against the Euro (EUR), the kiwi has given back gains this week falling to 0.5880 (1.7015) into early Thursday. A hawkish tone by ECB’s Nagel said more rises are necessary as the Eurozone inflation accelerated recently to 10.7%. This is the highest since 2009, predicted to stay above the target zone of 2% through 2024. There is a high probability the Eurozone will fall into recession later this year. The risk driven kiwi may struggle into the close.

Current Level: 0.5869 (1.7038)
Resistance: 0.5940 (1.7440)
Support: 0.5735 (1.6840)
Last Weeks Range: 0.5825-0.5991 (1.6691-1.7165)

The British Pound (GBP) was bid Monday reversing some of the previous week losses as it reached 1.9445 (0.5140) against the New Zealand Dollar (NZD) The Bank of England (BoE) are expected to keep raising rates to combat inflation as GDP forecasts for the following couple of years worsen. The UK economy is expected to contract 1.6% in 2033 and a 0.5% in 2024 as citizens brace for a massive cost of living squeeze. Looking ahead we have UK m/m GDP Friday. We expect the kiwi to kick on towards the weekly close.

Current Level: 0.5173 (1.9331)
Resistance: 0.5235 (1.9640)
Support: 0.5090 (1.9100)
Last Weeks Range: 0.5002-0.5232 (1.9110-1.9989)