FX News

FX News

FX Update: NZD gets oversold

Market Overview

 

  • The US Fed are expected to hold rates at their meeting this week, the ECB cuts.
  • We see downside risk to USD cross currencies as the Fed remains on the sidelines for longer. Alas this will boost the USD.
  • US Non-Farm Payroll prints well above expectations with 172,000 new jobs reported in May.
  • ANZ Bank predicts the RBNZ to cut rates in February 2025 not later in May as incoming data reports of a weaker local economy.
  • The Australian Dollar (AUD) has been the strongest currency this week while the Japanese Yen (JPY) has been the weakest traded currency.
FX News

Economic Calendar

Sunday June 9th
Day 4 EUR European Parliamentary Elections

Monday June 10
All Day AUD Bank Holiday
All Day CNY Bank Holiday
10th-15th CNY New Loans
Forecast 1750B
Previous 730B

Tuesday June 11
6:00pm GBP Claimant Count Change
Forecast 10.2K
Previous 8.9K
6:00pm GBP Average Earnings Index 3m/y
Forecast 5.70%
Previous 5.70%

Wednesday June 12
5:01am USD 10-y Bond Auction
4.48|2.5
1:30pm CNY CPI y/y
Forecast 0.40%
Previous 0.30%
1:30pm CNY PPI y/y
Forecast -1.50%
Previous -2.50%
6:00pm GBP GDP m/m
Forecast 0.00%
Previous 0.40% Read more

FX News

AUD/GBP Transfer

The Australian Dollar (AUD) recorded a fresh 5 week low of 0.5195 (1.9250) against the British Pound (GBP) before pulling back to 0.5215 (1.9170) numbers early Friday. UK Composite PMI’s rose to 54.7 from 52.5 the previous month, the fastest pace over the last 2 years however, with a contracting economy- GDP falling from 5.0% to 1.3% over a matter of months we expect worrying times ahead. Meanwhile Australian GDP came in at 0.1% for the first quarter, softer than the 0.2% markets were expecting. RBA governor Bullock saying if inflation remains sticky the central bank may need to raise rates again. We expect the cross to retest 0.5235 (1.9100) levels based on Fib analysis.

The current interbank midrate is: AUDGBP 0.5210 GBPAUD 1.9193

The interbank range this week has been: AUDGBP 0.5192- 0.5238 GBPAUD 1.9091- 1.9259

 

FX News

NZD/GBP Transfer

The New Zealand Dollar (NZD) pushed its way past resistance at 0.4840 (2.0660) this week against the British Pound (GBP) on its way to post 0.4855 (2.0600) in early Friday. The first time in 14 weeks (late Feb) we have seen these prices in the cross. UK construction rose in May, the index reporting 54.7 vs 52.5 expected, the biggest increase in activity in two years. Nevertheless, the UK economy is contracting at a rapid rate with worrying times ahead. We could see further upside in the NZD towards 0.4870 (2.0530) where heavy resistance sits.

The current interbank midrate is: NZDGBP 0.4839 GBPNZD 2.0665

The interbank range this week has been: NZDGBP 2.0605- 2.0757 GBPNZD 0.4817- 0.4853

FX News

AUD/USD Transfer

Apart form the Australian Dollar (AUD) spiking to 0.6698 early in the week against the US Dollar (USD) the cross has been choppy ever since pivoting around 0.6650 areas. The Aussie did get a small boost from Australian Trade Balance which came in at a surplus of 6.55B. The Australian economy grew just 0.1% in the first 3 months of 2024, with growth particularly weak in March. Markets were looking for a 0.2% gain in the quarter but with slowing retail spending and soft household spending, household budgets remain under pressure. While relief is on the way in the form of tax cuts which kick in July, rate cuts are some way off. With central bank policy starting to diverge we could see further upside in the AUD. US Non-Farm Payroll prints tonight. We expect normal volatility.

The current interbank midrate is: AUDUSD 0.6664

The interbank range this week has been: AUDUSD 0.6625- 0.6698

 

FX News

NZD/USD Transfer

The New Zealand Dollar (NZD) extended moves higher over the week against the US Dollar (USD) to reach 0.6210 as risk assets continue to do well. The big dollar slumped post ISM manufacturing data contracting in May for the second straight month. The new order index came in at 45.4 falling 3.7% points compared to April. US ADP also contracted in the month of May with numbers at 152,000 compared to 173,000 expected. This in turn led to the US treasury 10 year falling to a 2-month low. All eyes are on tonight Non-Farm Payroll release with expectations of a drop in the number of new people who found employment in May. The cross is trading just below the yearly high of 0.6280 and may find it tough to breach resistance at 0.6220.

The current interbank midrate is: NZDUSD 0.6192

 

The interbank range this week has been: NZDUSD 0.6118- 0.6214

FX News

NZD/AUD Transfer

The New Zealand Dollar (NZD) continues to extend moves higher against the Australian Dollar (AUD) reaching 0.9330 (1.0720) in Thursday trading. Friday prices sit just off this around 0.9305 (1.0750) as I write. Wednesday’s Australian GDP came in lower at 0.1% compared to 0.2% expected surprising markets, the AUD slid further over the news. Governor Bullock making earlier comments suggesting if growth was lower the RBA would consider cutting interest rates. However, she also said post release that if inflation remained sticky the RBA could hike interest rates again if needed. It’s also worth noting that with a slide in iron ore prices and less of a demand in Chinese steel demand of late this has played a part in the weaker AUD. Next week will be quiet on the data front with just Australian unemployment numbers releasing.

The current interbank midrate is: NZDAUD 0.9286 AUDNZD 1.0762

The interbank range this week has been: NZDAUD 0.9232- 0.9325 AUDNZD 1.0723- 1.0831

 

 

FX News

Calendar of Economic Releases

Monday June 3rd
All Day NZD Bank Holiday

Tuesday June 4th
1:45am USD Final Manufacturing PMI
Forecast 50.9
Previous 50.9
2:00am USD ISM Manufacturing PMI
Forecast 49.8
Previous 49.2
2:00am USD ISM Manufacturing Prices
Forecast 60
Previous 60.9

Wednesday June 5th
2:00am USD JOLTS Job Openings
Forecast 8.40M
Previous 8.49M
1:30pm AUD GDP q/q
Forecast 0.20%
Previous 0.20% Read more

FX News

AUD/GBP Transfer

The Australian Dollar (AUD) improved over the week to 0.5225 (1.9140) against the British Pound (GBP) before falling back towards 0.5200 (1.9240). Australian Retail Sales published down on expectation at 0.1% vs 0.3%, sending the AUD higher on the news before CPI y/y came in at 3.6% a surprise higher than the 3.4% markets were expecting. The RBA wont hike again but their rate cut campaign has been extended, with rates not predicted to be cut until early to mid-2025. Bouncing off the 50-day moving average the cross should extend lower retesting 0.5200 (1.9230) into the close.

The current interbank midrate is: AUDGBP 0.5209 GBPAUD 1.9175

The interbank range this week has been: AUDGBP 0.5196- 0.5225 GBPAUD 1.9136- 1.9242

FX News

AUD/USD Transfer

Australian Inflation forecasting just got murkier with price pressures weighing heavy. Australian CPI published at 3.6% in the 12 months to April compared with 3.5% forecast. The Bank of Australia warning that they have not forgotten about a possible hike on the horizon after inflation published higher than expected for the second straight month. We expect the RBA to hold rates higher for longer at 4.35% with the first rate cut not until early-mid 2025 depending largely on wage pressures. The Australian Dollar (AUD), US Dollar (USD) cross traded below the bull trendline this week breaking past support at 0.6620 to 0.6590 in early Friday trading. Meanwhile US prelim GDP came in soft at 1.3% in the first quarter after 1.6% in the fourth quarter 2023 reflecting weaker consumer spending.

The current interbank midrate is: AUDUSD 0.6634

The interbank range this week has been: AUDUSD 0.6589- 0.6679