AUD/GBP Transfer

The Australian Dollar (AUD) has been massacred thus far in 2024 coming from 0.5360 (1.8650), we have seen the British Pound (GBP) gain strength to 1.9330 (0.5175) this morning. Retail Sales in the UK sent the GBP lower briefly when data published at -3.2% instead of the anticipated -0.5% however the GBP recovered into the weekly close. UK Manufacturing data is predicted to come in soft Wednesday before an Aussie Day holiday Friday. Massive support at 0.5170 (1.9350) could come into play.

The current interbank midrate is: AUDGBP 0.4781 GBPAUD 2.0916

The interbank range this week has been: AUDGBP 0.5168- 0.5204 GBPAUD 1.9213- 1.9347

AUD/USD Transfer

Are we seeing signs of a long-term base forming in the Australian Dollar (AUD), US Dollar (USD) pair at 0.6530? A January close below this level would be cause for concern and a rethink of where support lies. Certainly, when we look at the yearly open price circa 0.6815 the Aussie has come off a chunk in a short period of time. With the RBA done hiking interest rates, 2024 will be about cuts and the timing of these. We are forecasting 3 plus cuts in 2024. Let’s hope the banks pass on these rate drops to consumers- say are saying mortgage holders shouldn’t get too excited as not all cuts are passed down. The AUD may be pushed around this week by offshore forces based on no data publishing and an Australian Holiday Friday creating thin market conditions.

The current interbank midrate is: AUDUSD 0.6567

The interbank range this week has been: AUDUSD 0.6564- 0.6612

NZD/GBP Transfer

The New Zealand Dollar (NZD) has been unable to get a look against the British Pound (GBP) so far in 2024 with the cross reaching 0.4790 (2.0880) this morning. The yearly open was circa 0.4970 (2.0120) so far it hasn’t been a particularly good start to the year from the kiwi. The only blip on the chart came late last week when UK Retail Sales published poorly at -3.2% compared to predictions of -0.5%. Taking the GBP lower briefly before recovering on a lack of risk in the market. This week’s docket sees NZ CPI q/q which is expected to print around 0.5% and take the y/y figure from 5.6% to 4.7% cementing the need for the RBNZ to cut rates mid-year. The GBP may struggle to breach 0.4775 (2.0950) support this week.

The current interbank midrate is: NZDGBP 0.5169 GBPNZD 1.9346

The interbank range this week has been: NZDGBP 0.4777- 0.4830 GBPNZD 2.0700- 2.0931

NZD/AUD Transfer

Moves in the Australian Dollar (AUD), New Zealand Dollar (AUD) cross extended off 0.9275 (1.0780) Monday from mid week’s 0.9365 (1.0680) as the Aussie eyes a fresh yearly high around 1.0830 (0.9230). The IMF has suggested the RBA should cut spending and hike rates further in order to reduce inflation targets back to the target band before 2026. This will have certainly been factored into recent AUD demand. The economic docket is thin this week in the pair with only NZ CPI y/y printing. Forecast is for a fall of 0.5% in the fourth quarter down from 1.8% in the third quarter. Year on year should print around 4.7% down for 5.6% confirming further pressure for the RBNZ to cut rates mid year or sooner. Australia Day Holiday Friday should see the cross meander into the close.

The current interbank midrate is: NZDAUD 0.9245 AUDNZD 1.0809

The interbank range this week has been: NZDAUD 0.9243- 0.9289 AUDNZD 1.0765- 1.0818

NZD/USD Transfer

The New Zealand Dollar (NZD) has been sold off heavily in 2024 after starting the year at 0.6300 levels it has fallen to 0.6080 against the US Dollar (USD). NZ Manufacturing PMI’s were down to 43.1 from 46.5, together with talk around rate cuts have had a negative impact on the kiwi. NZ CPI tomorrow is due to publish much lower than the previous quarter of 5.6% y/y at 4.7% y/y confirming rate cuts should start around mid-year. Current forecasts are that inflation is predicted to be back around the target range of 1-3% by the third quarter. The cross is looking oversold to us at current levels, we would need to see a break below 0.6000 to confirm a bearish trend and take the heat off upside moves.

The current interbank midrate is: NZDUSD 0.6077

The interbank range this week has been: NZDUSD 0.6067- 0.6137

This Week’s Key Points

Market Overview:

Key Points:

• The New Zealand Dollar has fallen sharply this year against a basket of currencies underperforming against its peers.
• The Bank of England is predicted to hold rates unchanged at 5.25% at their next meeting.
• Economists are becoming more assured that the US economy will avoid falling into a recession this year.
• The ECB are predicted to cut their interest rates earlier than expected as soon as June this year.
• The Bank of Canada is expected to leave their interest rate unchanged later this week at 5.0% since hiking it 0.25% last June.
• Israeli prime minister Netanyahu has rejected a deal for the complete withdrawal of Israelis from the Gaza territory and to end the war.
• The British Pound (GBP) has been the strongest currency in 2024 while the weakest currency has been the Japanese Yen (JPY)

Economic Releases Calendar

Tuesday January 23
Tentative JPY Monetary Policy Statement
Tentative JPY BOJ Outlook Report

Wednesday January 24
10:45am NZD CPI q/q 0.50% 1.80%
9:15pm EUR French Flash Manufacturing PMI 42.5 42.1
9:15pm EUR French Flash Services PMI 46.1 45.7
9:30pm EUR German Flash Manufacturing PMI 43.7 43.3
9:30pm EUR German Flash Services PMI 49.1 49.3
10:30pm GBP Flash Manufacturing PMI 46.7 46.2
10:30pm GBP Flash Services PMI 53 53.4

Thursday January 25th
3:45am CAD BOC Monetary Policy Report
3:45am CAD BOC Rate Statement
3:45am CAD Overnight Rate 5.00% 5.00%
3:45am USD Flash Manufacturing PMI 47.6 47.9
3:45am USD Flash Services PMI 51 51.4
4:30am CAD BOC Press Conference Read more

EURO/AUD Transfer

The European economy is in recessionary territory, with the added pressures of resurgent inflation. Inflation and bond yields had been collapsing in Europe, towards the latter part of 2023, with a combination of tumbling inflation and recessionary economic conditions. A resurgent inflation will ensure tight monetary conditions remain in place for an extended period. This will support the EUR (although ensure recessionary conditions remain). Similar pressures exist in the Australian economy so the cross rate will not move dramatically.

Current Level: 1.6611
Resistance: 1.6260
Support: 1.6666
Last Weeks Range: 1.6260 – 1.6611

AUD/EURO Transfer

The European economy is in recessionary territory, with the added pressures of resurgent inflation. Inflation and bond yields had been collapsing in Europe, towards the latter part of 2023, with a combination of tumbling inflation and recessionary economic conditions. A resurgent inflation will ensure tight monetary conditions remain in place for an extended period. This will support the EUR (although ensure recessionary conditions remain). Similar pressures exist in the Australian economy so the cross rate will not move dramatically.

Current Level: 0.6020
Resistance: 0.6150
Support: 0.6000
Last Weeks Range: 0.6020 – 0.6100

GBP/AUD Transfer

The surge in UK inflation, rising back to 4% this week, will ensure the Bank of England remains hawkish in their monetary policy, for the early part of 2024. This will support the GBP and add to the weaker economic conditions, domestically. The interest rate differential may support a stronger pound although RBA actions may dimmish the differential.

Current Level: 1.9398
Resistance: 1.9047
Support: 1.9417
Last Weeks Range: 1.9011 – 1.9398