FX News

The Australian Dollar (AUD) broke into new ground Monday extending its incredible bull run against a war broken Euro (EUR) reaching 0.6880 (1.4530) Monday clocking the highest level since July 2017. IFO German Business climate released poor Friday adding to the Eurozone economic weakness missing expectations resulting in significant downside pressures. The Euro should be doing better than it has been with the reinforcement of a new hiking cycle towards the end of the year while decent economic pace and elevated inflation should be also helping. On the economic docket we have ECB president Lagarde speaking tomorrow. We expect a little AUD downside over the coming days as negotiations in Turkey take place and the EUR improves.

Current Level: 0.6816 (1.4671)
Resistance: 0.6890 (1.5350)
Support: 0.6515 (1.4520)
Last Weeks Range: 0.6671-0.6846 (1.4606-1.4989)

The Australian Dollar (AUD) climbed higher Monday against the British Pound (GBP) extending its massive run against the British Pound (GBP) to equal levels around December 2020 at 0.5730 (1.7460). The Russian invasion of Ukraine has hit the Pound hard among other currencies of late, the main driver of sentiment offering decent support for the Aussie. We are somewhere around the 33rd day since the war began, the GBP has conceded significant value over this time from 0.5370 (1.8620). On the latest development news over the wire’s negotiators from both Ukraine and Russia will meet in Turkey this week to try and resolve differences. Overnight the Kyiv border ceasefire should last until Wednesday which may be contributing to the positive risk tone underway. A breakthrough 0.5765 (1.7350) could signal further upside for the AUD – for now we expect price back at 0.5655 (1.7680).

Current Level: 0.5720 (1.7482)
Resistance: 0.5750 (1.7800)
Support: 0.5620 (1,7400)
Last Weeks Range: 0.5604-0.5706 (1.7525-1.7844)

The Australian Dollar has reached just shy of the Oct 2021 high at 0.7550 overnight against the US Dollar (USD) reversing back to 0.7480 this morning. US equities underperformed overnight as inflation and monetary risks started to come into play beside continued geopolitical risks. The Aussie still remains the top performer over the past month since the war agst Ukraine started. Stock and commodity values remain elevated assisting the currency to  clock fresh highs. Signs of a ceasefire as new negotiations emerge with Russia this week will be held in Turkey. The situation on the ground still remains tense with Russian forces trying to take over Mariupol in south-eastern Ukraine. Key data out this week is US GDP q/q which is forecast to come in at 7.0%. Non-Farm Payroll data prints Friday with unemployment which is expected to improve slightly to 3.7% from 3.8%. Early Tuesday action sees price in the pair back around 0.7470- we predict a pull back off recent highs as long position profits are squared up.

Current Level: 0.7493
Resistance: 0.7550
Support: 0.7450
Last Weeks Range: 0.7373-0.7534

The Euro (EUR) remained heavy leading into the weekly close against the New Zealand Dollar (NZD) with a terrible IFO (German business climate) read. The most prominent German indicator, its lowest since January 2021. Trading around the 0.6375 (1.5690) area Monday the pair clocking a July 2017 high. The war in Ukraine still keeps a solid grip over the Euro, eurozone inflation remains a problem as well with  forecasters pricing in further rises yet. Locally we have business confidence Wednesday. A retest of the October 2016 high at 0.6700 (1.4500) levels looks possible.

Current Level: 0.6279 (1.5926)
Resistance: 0.6370 (1.6100)
Support: 0.6210 (1.5700)
Last Weeks Range: 0.6228-0.6348 (1.5751-1.6054)

Range bound activity in the British Pound (GBP), New Zealand Dollar (NZD) over the previous week saw price ease slightly lower off the weekly open to 0.5265 (1.90) levels. Softer UK Retail Sales lengthened out the kiwi Friday as data showed a drop of -0.3% compared to expectations of 0.6% growth in the month of February. Bouncing off long term November 2021 resistance confirms this area may hold for a while, 0.5530 (1.8080) is the next point of strength the June 2017 high. A dovish speech overnight by (BoE) Governor Bailey after striking a cautious tone when asked if he would be raising rates again at the next central bank meeting sent the GBP lower. Bailey reiterating- uncertain outlook in Ukraine situation is causing much volatility and instability. Looking ahead we have a quiet week of data with just ANZ business confidence to publish. We expect a little downside this week in the kiwi as price reverses off recent highs.

Current Level: 0.5268 (1.8982)
Resistance: 0.5305 (1.9100)
Support: 0.5235 (1.8850)
Last Weeks Range: 0.5218-0.5294 (1.8886-1.9164)

The Australian Dollar (AUD), New Zealand Dollar cross trades around 0.9210 (1.0860) early in Tuesday sessions, the Aussie pushed higher off the weekly open from 0.9285 (1.0770) as equity markets and commodities recovered from losses, the Nasdaq up 1.3% on the day and iron ore at 146.00 from 136.00 late last week supporting an outperforming AUD across the board. The RBA is facing renewed pressures to start lifting its cash rate from spending pressures in the Federal Budget tonight. The spending should act as an additional stimulus for the economy which is facing upside to inflation already at its highest level in 5 years. Predictions are for the RBA to start raising their cash rate from June to 0.75% with risks it could happen earlier in May. On the calendar is ANZ Business Confidence Wednesday in NZ which could dampen NZD buyer mood. Staunch resistance at 0.9130 (1.0950) should hold- the long term 4 year low.

Current Level: 0.9205 (1.0851)
Resistance: 0.9285 (1.0920)
Support: 0.9160 (1.0770)
Last Weeks Range: 0.9253-0.9353 (1.0691-1.0807)

Recent form in the New Zealand Dollar (NZD) saw prices up around 0.6990 at the close of the week against the US Dollar (USD) before dropping to 0.6890 into Tuesday as a pullback in equity prices and US bond yields took hold. The 2022 bull rally still holds- the run up from late January’s 0.6530 remains intact. We would need to see a break lower through 0.6800 to see a considerable trend change. The 0.6870 level is immediate support, the kiwi is struggling to ward off further losses amid poor February job’s numbers (down 0.3%). Looking ahead we have US Unemployment data and Manufacturing Friday which will make for choppy action as it always does. We think the NZD may pullback further this week and give back recent gains.

Current Level: 0.6903
Resistance: 0.6980
Support: 0.6860
Last Weeks Range: 0.6863-0.6988

Tuesday 29/03
12am, GBP, BOE Gov Bailey Speaks

Wednesday 30/03
1pm, USD, CB Consumer Confidence
Forecast: 106.9
Previous: 110.5
1pm, NZD, ANZ Business Confidence
Previous: -51.8
9:10pm, GBP, MPC Member Broadbent Speaks

Thursday 31/03
1:15am, USD, ADP Non-Farm Employment Change
Forecast: 455K
Previous: 475K
1:30am, USD, Final GDP q/q
Forecast: 7.10%
Previous: 7.00% Read more