Sunday Sep 24
3:00am NZD Daylight Saving Time Shift
Monday Sep 25
9:00pm EUR German ifo Business Climate 85.1 85.7
Wednesday Sep 27 3:00am USD CB Consumer Confidence 105.5 106.1
2:30pm AUD CPI y/y 5.20% 4.90%
Thursday Sep 28 All Day EUR German Prelim CPI m/m 0.30% 0.30%
8:00pm EUR Spanish Flash CPI y/y 3.50% 2.60% Read more
The Australian Dollar (AUD) reached 0.6500 midweek against the US Dollar (USD) but couldn’t hold this level, falling back sharply to 0.6400 on the Fed announcement. The Federal Reserve held the cash rate at 5.5% Thursday as predicted but signalled they were prepared to hike again one more time in 2023 to stabilise rising inflation. It often takes many months to see the full effects of a slowing economy. Fed chair Powell said a slower pace of hikes would give them more time to see how the economy responds. Pivoting around the 0.6400 area Friday we see a possible retest of the recent low at 0.6360 over the coming couple of weeks.
The current interbank midrate is: AUDUSD 0.6403
The interbank range this week has been: AUDUSD 0.6385- 0.6511
The Australian Dollar (AUD) continued its 5-week dash to 0.5250 (1.9050) against the English Pound (GBP) Wednesday before giving back small gains over the last few hours to 0.5220 (1.9160).It has been all UK data on the docket this week, the GBP taking hits from all corners. UK inflation y/y printed better than forecast at 6.7% vs 7.0% a downside surprise, welcomed by the Bank of England with further rate hikes firmly coming into question. Certainly, last nights BoE “hold” at 5.25% was mostly priced in based on this inflation read. The central bank halting after 14 straight hikes going back to Dec 2021. The Bank was a little dovish, but another rate hike is still possible. BoE members voted 5 in favour of holding, including Governor Bailey, vs 4 to hike. We see stiff resistance at 0.5265 (1.9000) on the chart.
The current interbank midrate is: AUDGBP 0.5213 GBPAUD 1.9182
The interbank range this week has been: AUDGBP 0.5025- 0.5271 GBPAUD 1.9055- 1.9283
The New Zealand Dollar (NZD), British Pound (GBP) pair has been centre of attention this week with a slew of data releasing. UK CPI came in at 6.7% compared to 7.0% predicted leading to a halt to the Bank of England (BoE) cash rate overnight. This ends their 14 straight run of hikes. It was always going to be close with most predicting a hike to 5.5% the likely result. The UK economy looks to have turned a corner choking high inflation woes. NZ GDP also surprised with data representing growth of 0.9% in the second quarter officially taking the economy out of a shallow recession. The RBNZ will now have work to determine if they will need to raise rates again to deflate the economy. The cross has only travelled one way over the week clocking 0.4825 (2.0720) this morning, the NZD extending its run higher for the 5th straight week after starting out around 0.41770 (2.0960)
The current interbank midrate is: NZDGBP 0.4819 GBPNZD 2.0751
The interbank range this week has been: NZDGBP 0.4759- 0.4834 GBPNZD 2.0688- 2.1009
US Dollar (USD) weakness moved the New Zealand Dollar (NZD) to 0.5980 midweek before reversing profits to 0.5900 levels. The Federal Reserve held their cash rate at 5.50% with prospects of another hike later this year as the economy expands at a decent pace. Recent months of positive incoming data has the Fed on high inflation alert. New Zealand grew by a staggering 0.9% in the quarter ending June 2023 yanking the economy out of a technical recession after stalling in the last 2 quarters. The RBNZ will now have work to do determining if they will need to raise rates again to deflate the economy if they deem it to be running above capacity. They will be concerned around rising inflation and wage growth. Forecasts are still for a slow recovery in 2024 and 2025 before things return to normal in late 2025. We expect the kiwi to remain under pressure over the next week.
The current interbank midrate is: NZDUSD 0.5919
The interbank range this week has been: NZDUSD 0.5894- 0.5985
The New Zealand Dollar (NZD) broke out from the long-term bear channel Wednesday against the Australian Dollar (AUD) passing 0.9210 (1.0860) on its way to clock 0.9270 (1.0790) early morning Friday. The RBA meeting minutes considered a 25-point hike at their September meeting but chose to hold based on risks the economy could slow considerably more than forecasts. NZ Growth published at an unbelievable 0.9% for the second quarter of 2023 after forecasts were for a 0.4% number. This will certainly have the RBNZ thinking on whether the economy is “deflationary” enough to not need to hike rates again. Australian 3rd quarter CPI publishes next week expected to come in under 6.0%
The current interbank midrate is:NZDAUD 0.9243 AUDNZD 1.0810
The interbank range this week has been: NZDAUD 0.9164- 0.9251 AUDNZD 1.0810- 1.0912
The Australian Dollar (AUD) lost momentum towards week’s end pulling back from 0.6080 (1.6450) to 0.6035 (1.6570) , prices into Tuesday extended lower to 0.6025 (1.6600) as the Euro (EUR) took charge post last week’s ECB hike. Focus now lies with the time the ECB may hold rates at 4.50% with projections they were going to deliver cuts next year. Although economic considerations have fallen short the underlying labour markets remain robust. Lagarde speaks Thursday before French and German manufacturing. We may see the EUR continue to push higher this week across the board.
Current Level: 1.6603
Resistance: 1.7000
Support: 1.6350
Last Weeks Range: 1.6453 – 1.6795
The Australian Dollar (AUD) lost momentum towards week’s end pulling back from 0.6080 (1.6450) to 0.6035 (1.6570) , prices into Tuesday extended lower to 0.6025 (1.6600) as the Euro (EUR) took charge post last week’s ECB hike. Focus now lies with the time the ECB may hold rates at 4.50% with projections they were going to deliver cuts next year. Although economic considerations have fallen short the underlying labour markets remain robust. Lagarde speaks Thursday before French and German manufacturing. We may see the EUR continue to push higher this week across the board.
Current Level: 0.6023
Resistance: 0.6115
Support: 0.5880
Last Weeks Range: 0.5954- 0.6077
The Australian Dollar (AUD) is drifting around the 0.5200 (1.9240) zone early Tuesday against the British Pound (GBP) having outperformed last week from 0.5115 (1.9550) levels. It’s a big calendar of data on the books this week- the Bank of England (BoE) are predicted to raise interest rates from 5.25% to 5.50% Thursday however CPI releases the day prior which could put a cat amongst the pigeons if the figure is above 7.0% forecast raising questions of further hiking not to mention pushing up the value of the GBP. Baileys post release will be key. UK Retail Sales and Manufacturing print at the end of the week. A push through 0.5225 (1.9140) looks unlikely.
Current Level: 1.9230
Resistance: 1.9900
Support: 1.8975
Last Weeks Range: 1.9194 – 1.9553
The Australian Dollar (AUD) is drifting around the 0.5200 (1.9240) zone early Tuesday against the British Pound (GBP) having outperformed last week from 0.5115 (1.9550) levels. It’s a big calendar of data on the books this week- the Bank of England (BoE) are predicted to raise interest rates from 5.25% to 5.50% Thursday however CPI releases the day prior which could put a cat amongst the pigeons if the figure is above 7.0% forecast raising questions of further hiking not to mention pushing up the value of the GBP. Baileys post release will be key. UK Retail Sales and Manufacturing print at the end of the week. A push through 0.5225 (1.9140) looks unlikely.
Current Level: 0.5200
Support: 0.5025
Resistance: 0.5270
Last week’s range: 0.5114 – 0.5209