FX News

Record shifts in prices in the Australian Dollar (AUD), British Pound (GBP) has seen the Aussie monster the Pound over the last fortnight clocking 0.5500 (1.8190) in morning trading as it bares down on 0.5520 (1.8120) resistance. Punters are betting that the war in Ukraine is unlikely to hinder the Bank of England from raising rates again in March although some scaling back from early hike projections will most likely happen towards the end of this year. Aussie December quarter GDP came in slightly below forecast at 3.4% with big picture growth a little uncertain with the war in Ukraine continuing to provide markets with wild swings. Looking into next week- economic data is thin.

Exchange Rates:
The current interbank midrate is: AUDGBP 0.5491 GBPAUD 1.8211
The interbank range this week has been: AUDGBP 0.5369- 0.5498 GBPAUD 1.8186- 1.8624

Geopolitical risks and the hopes of a ceasefire between Russian and Ukraine forces have underpinned a rampant Australian Dollar (AUD) even though a seriously worsening situation could turn the tables and underpin the safe haven US Dollar (USD) capping further upside moves. The Aussie posting gains for the fifth straight week to 0.7340 Friday morning. Resistance on the chart at 0.7300 clearly held little effect. Fed chairman Powell supports a 0.25% rise to interest rates later this month. The Fed also expected to start shrinking its 9T balance sheet and support for the economy amid high inflation. Jobless numbers in the US ticked lower Thursday remaining at record lows as the labour market hangs tight following on from a marked decline in covid numbers. Non-Farm payroll prints tonight and could reflect a surprise uptick in the number of newly employed. The next point on the chart of interest is 0.7520, if we see price up here in the short term it will be a miracle.

Exchange Rates:
The current interbank midrate is: AUDUSD 0.7331
The interbank range this week has been: AUDUSD 0.7161- 0.7347

The New Zealand Dollar (NZD) continues to plough forth against a battle heavy Euro (EUR) over the week, the cross touching 0.6145 (1.6270) in early Friday trading, it’s quite staggering seeing the weakness in the Euro currency of late. The NZD climbing all over the Euro 11 from the last 12 days. The Euro suffering massive downside pressures in the Russian-Ukraine crisis. Growth prospects this week have been compromised as well with the ECB forced to hold off answering to inflation risks. The latest data shows more records falling with Euro inflation rising to 5.8% y/y from January’s 5.1% with the energy sector contributing the biggest chunk. Heavy resistance at 0.6210 (1.6100) should hold on the chart the August 2017 high. We await headline news as Russian and Ukraine negotiators meet again to hold their third round of talks.

Exchange Rates:
The current interbank midrate is: NZDEUR 0.6142 EURNZD 1.6281
The interbank range this week has been: NZDEUR 0.5980- 0.6146 EURNZD 1.6270- 1.6720

The New Zealand Dollar (NZD) extended gains Thursday to reach 0.5096 (1.9620) in early Friday trading matching the late December high. Business Confidence turned in poor as well as Building Permits making the kiwi sluggish for a while but with sentiment generally supporting risk currencies there is not stopping it. The Sterling is on course for its 9th consecutive daily decline but massive long term resistance at 0.5510 (1.8150) could unravel its momentum. Data is thin over the next few days, we expect a push back from the GBP in the coming days and a retest of 1.8400 (0.5430)

Exchange Rates:
The current interbank midrate is: NZDGBP 0.5093 GBPNZD 1.9634
The interbank range this week has been: NZDGBP 0.5005- 0.5100 GBPNZD 1.9604- 1.9998

Unbelievable scenes in currency markets have seen unpredictable rises in risk currencies of late as well as risk products generally such as commodities. How is this possible with global risks and sentiment firmly aligned to the downside. The New Zealand Dollar (NZD) keeps posting gains, up at 0.6800 against the US Dollar (USD) Friday. It was only 4 weeks ago when the kiwi was staring down the barrel of crashing through 0.6500. Certainly the currency looks like it wants to build on recent form with the upward trajectory and positive tone. Fed chairman Powell supports a 0.25% rise to interest rates later this month. The Fed also expected to start shrinking its 9T balance sheet and support for the economy amid high inflation. The Fed chair also commenting on the Russian war on Ukraine has added uncertainty to the outlook. New applications for unemployment in the US edged lower Thursday remaining at record lows as the labour market hangs tight following on from a marked decline in covid numbers. Despite tensions on the Ukraine/Russian border hopes of a ceasefire have and should continue to support a rising NZD

Exchange Rates
The current interbank midrate is: NZDUSD 0.6797
The interbank range this week has been: NZDUSD 0.6670- 0.6809

Commodities, equities and general risk products have been running hot of late in a most bizarre fashion, supporting the Australian Dollar (AUD) a little more than the New Zealand Dollar (NZD). Volatility in the cross remains forefront while Ukraine/Russian negotiations have not resulted in a ceasefire. In fact Russia have intensified attacks on Ukrainian cities and captured the Black Sea port of Kherson. The good news- Russian and Ukraine have agreed to hold third round talks. The RBA release Tuesday brought a swath of sideways movement as the RBA said they would be patient in monitoring inflation – committed to a supportive monetary policy and not raising the cash rate until inflation is within the 2.0% to 3.0% target range. Iron Ore came off 130.00 early in the week posting 144.50 this morning underpinning AUD moves. We would be surprised if we saw 0.9250 (1.0810) the AUD looks to be running out of steam.

Exchange Rates:
The current interbank midrate is: NZDAUD 0.9273 AUDNZD 1.0776
The interbank range this week has been: NZDAUD 0.9263- 0.9340 AUDNZD 1.0706- 1.0795

Market Overview

Key Points

• Worldwide coronavirus cases surpass 436.785 million with over 5.972 million official deaths.
• New Zealand has 14,633 new active community cases of coronavirus  with 344 people in hospital, 5 in intensive care.
• PM Ardern announced NZ isolation changes yesterday, with no more self-isolation required for New Zealanders and tourists who have been vaccinated.
• The Moscow Exchange is closed again today, and the Nasdaq and NYSE have temporarily halted stocks of Russian based companies
• Australian Consumer Confidence drops 2.6% from the previous week
• French President Macron has spoken to Putin requesting an immediate cease fire
• Russian Central Bank tries to stop the selling of Russian Securities
• The US State Dept has said they have indicated more sanctions on Russia if no de-escalation from Russia is forthcoming Read more