FX News

FX News

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)

FX News

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

FX News

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

FX News

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

FX News

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

FX News

AUD/GBP 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: 0.5155
Support: 0.5150
Resistance: 0.5250
Last week’s range: 0.5155 – 0.5260

FX News

AUD/USD Transfer

Commodity demand has been directly impacted by the recessionary economic conditions in Europe, which has a down-chain economic impact on China, and thus the Australian commodity markets. Inflationary pressures in the Australian economy remain clear and present, while the labour market remains relatively firm. The resurgent reserve currency has forced the AUD back from 2023 highs of 0.6850, back down towards 0.6500. There may be some downside left, if Geo-Political conditions in the Middle East extend and supply chain problems remain.

Current Level: 0.6550
Support: 0.6540
Resistance: 0.6660
Last week’s range: 0.6550 – 0.6700

FX News

EURO/NZD Transfer

European economies are suffering recessionary economic conditions and a resurgence in inflation, dimming the likelihood of interest rate cuts in 2024 and adding to tight monetary conditions. The tight money conditions have supported the EUR, although weaker trade and growth do not auger well for 2024.

Current Level: 1.7889
Resistance: 1.7699
Support: 1.7921
Last Weeks Range: 1.7637 – 1.7899

FX News

NZD/EURO Transfer

European economies are suffering recessionary economic conditions and a resurgence in inflation, dimming the likelihood of interest rate cuts in 2024 and adding to tight monetary conditions. The tight money conditions have supported the EUR, although weaker trade and growth do not auger well for 2024.

Current Level: 0.5590
Support: 0.5580
Resistance: 0.5650
Last week’s range: 0.5590 – 0.5670

FX News

GBP/NZD Transfer

The GBP has been supported by a hawkish Bank of England monetary policy for much of 2023, but had signalled a more neutral 2024. The rebound in inflation in the UK in early 2024, will only serve to reinforce the Central Banks tight policy and add support for the Pound. The cross rate is likely to have a downward bias on the short term.

Current Level: 2.0920
Resistance: 2.0618
Support: 2.1052
Last Weeks Range: 2.0618- 2.0920