FX News

The New Zealand Dollar (NZD) extended its recent run higher against the British Pound (GBP) in a big way Monday coming off a weekly close at 0.5180 (1.9300) levels to post 0.5255 (1.9035) late in the day. While risk sentiment has been terrible the Russian/Ukraine war has put significant downward pressure on the Pound, the kiwi reaching a 2022 high. Russian aggression may continue to benefit the kiwi for a while yet. Overnight prices reversed to 0.5200 (1.9220) as punters analysed the potential fallout of energy sanctions. Although the risk sensitive NZD has the potential to trade much lower, most of the action to date since the war began has been about the downside risks to  Europe and UK trade impacts. Where to from here is anyone’s guess literally, but with surging inflation risks and supply chain woes worsening the RBNZ will carry on hiking which could underpin the kiwi over the following months. Read more

The New Zealand Dollar (NZD) retreated to a June 2021 low of 0.9265 (1.0795)  late Friday against the Australian Dollar (AUD) before moving back to 0.9345 (1.0700) in early Tuesday trading. Both currencies have been very well supported of late with commodities and risk products upside momentum- more so in the Aussie as the currency is more weighted commodity fluctuations. Recent trading within these late January ranges looks to continue. Governor Lowe speaks tomorrow at a financial summit tomorrow and could give further clues as to monetary policy tightening. Geopolitical tensions remain high in the Russian/Ukraine region and continue to affect the pair modestly, we expect a retest of 0.9370 (1.0670) as weakness in the Aussie develops. Read more

The risk correlated New Zealand Dollar (NZD) continues to be knocked around against the US Dollar (USD) as geopolitical tensions increase in the Ukraine/Russian war. The kiwi rose to 0.6920 late Monday tracking more than a cent higher off late Friday levels after a flurry of buying. What goes up must come down, the pair retracing towards 0.6820 as risk sentiment soured and commodities came off high’s and European leaders warned against banning energy imports from Russia. Risk flows should continue to weigh on NZD rallies over the week although with NZD economy inflation rises caused by supply chain problems could cause the RBNZ to continue with hikes at a rapid rate. The April 13 meeting is expected to report a 0.50% rise to 1.5% and could underpin the mighty kiwi for a while. One thing is for sure- it’s chaotic out there. Read more

Wednesday
11:15am, AUD, RBA Gov Lowe Speaks

Thursday
4am, USD, Jolts Job Openings
Forecast: 10.91M
Previous: 10.93M
4:30am, USD, Crude Oil Inventories
Previous -2.6M
7:01am, USD, 10-y Bond Auction
Previous 1.90|2.7 Read more

The Euro (EUR) is placed in a difficult spot, the currency is under a huge amount of pressure based on the Russia/Ukraine war compromising growth prospects and the EU is forced to put inflation risk on the back burner for now. The annual inflation in Euroland rose to a fresh high of 5.8% in February from 5.1% in January well above market projections of 5.4%. Expectations are for the ECB to defer any Asset Purchase Programme decisions until their April meeting given the geopolitical tensions. ECB interest rates should remain at or below current levels until inflation reaches its target band. Commodity prices should continue to support the AUD as investors sell the vulnerable EUR – for now.

Exchange Rates:
The current interbank midrate is: AUDEUR 0.6622 EURAUD 1.5101
The interbank range this week has been: AUDEUR 0.6417- 0.6633 EURAUD 1.5076- 1.5582

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