The GBP has suffered the rising reserve, but persistent and stubborn inflation ensures that Bank of England will continue to raise rates, which will support the GBP, in the short term. The UK operates a substantial interest rate differential benefit, so pressure on the cross rate is to the downside, for the AUD.
Current Level: .5115
Support: .5050
Resistance: .5200
Last week’s range: .5065 – .5140
The AUD has plunged all the way down to below 0.6400, suffering the weight of a resurgent US Dollar. This is likely to continue, as US inflation remains stubbornly high. Domestic markets will be focused on the RBA in the coming week, as they reveal their latest monetary policy decision. The RBA is expected to hold rates unchanged, but close attention will be paid to the narrative. It is likely to warn of hotter inflationary conditions. The RBA has ‘paused’ rate rises, as a direct result of intense political pressure, maintaining rates at lower levels than most Western Central banks. The premature pause has left the RBA vulnerable, as interest rate differentials offer selling opportunities. Downside pressures remain.
Current Level: .6478
Support: .6405
Resistance: .6510
Last week’s range: .6390 – .6480
The ECB Chair, LeGarde, warned of continued inflationary pressures and further rate rises at the Jackson Hole Symposium. The floundering economic situation in the Eurozone remains dire, especially in the ‘engine-room’, that was Germany. German Industrial/Manufacturing Production has been under severe pressure, from extremely elevated energy costs, with warnings that Government subsidies may be coming to an end. Flagging global demand for exports and a precipitous collapse in imports, are revealing a possible structural crisis. The prospects of further interest rate rise, supporting the EUR and the cross rate, will probably mean more downward pressures.
Current Level: .5501
Support: .5420
Resistance: .5525
Last week’s range: .5455 – .5510
The GBP had suffered a fairly substantial correction downwards, but has staged a small recovery, over the last week or so. Inflationary pressures remain strong in the UK, boosting the likelihood of further interest rate rises, from the Bank of England. This will lend further support for the GBP, over the short term, and downward pressure on the cross-rate.
Current Level: .4709
Support: .4650
Resistance: .4750
Last week’s range:.4685 – .4720
The NZD/AUD cross rate remains fairly stable around 0.9200. Volatility in the NZD has been reflected on the opposite side of the Tasman, reducing any break-out fluctuations. All eyes will be focused on this coming weeks RBA, interest rate decision. They are expected to hold rates unchanged, but the associated commentary will be closely watched. Warnings of hotter inflation, will spook markets, especially considering the discount with which the environment Australian interest rates are operating in.
Current Level: .9202
Support: .9120
Resistance: .9225
Last week’s range:.9150 – .9210
The NZD/USD has been subject to the machinations of the reserve currency, the US Dollar. The Jackson Hole Symposium, closing out last week, shed no new light on monetary policy. Fed Chairman Powell continued to warn of high inflation and further possible interest rate rises. Par for the course. PCE readings of inflation this week, confirmed it remained stubbornly high, increasing the risk of further rate rises. The NZD has plunged all the way back to 0.5900 and looks likely to remain under pressure, while the USD is supported by rising interest rates.
Current Level: .5962
Support: .5900
Resistance: .5990
Last week’s range: .5900 – .5980
Market Overview:
Key Points:
The Australian Dollar (AUD) held firm around the 0.6425 area post the open against the USD Dollar (USD) Monday as equity markets traded positive. It’s hard to know if we will see a reversal of sorts this week and a push higher, but with improved sentiment in China after an improved May manufacturing PMI read who knows. Australian Retail Sales came in hot at 0.5% in July after a poor June release surprising analysts as shoppers came out during the FIFA Women’s World Cup. Despite this the RBA is still likely to raise rates at the September 5 meeting. Looking ahead we have US Non-Farm Payroll Friday which will add volatility to the mix.
Current Level: 0.6432
Resistance: 0.6365
Support: 0.6500
Last Weeks Range: 0.6385 – 0.6488
No real moves early this week in the Euro (EUR), Australian Dollar (AUD) pair has price sitting around the 0.5940 (1.6830) area as we head into Tuesday. Aussie Retail Sales surprised with a 0.5% rise in July up on expectations of 0.2% and well above June’s -0.8%. A combination of dining out and the Women’s world cup football tournament impacting. The AUD may retest last week’s high of 0.5970 (1.6750) this week as Chinese pessimism improves and if equities remain buoyant.
Current Level: 1.6846
Resistance: 1.7065
Support: 1.6275
Last Weeks Range: 1.6751 – 1.7037
No real moves early this week in the Euro (EUR), Australian Dollar (AUD) pair has price sitting around the 0.5940 (1.6830) area as we head into Tuesday. Aussie Retail Sales surprised with a 0.5% rise in July up on expectations of 0.2% and well above June’s -0.8%. A combination of dining out and the Women’s world cup football tournament impacting. The AUD may retest last week’s high of 0.5970 (1.6750) this week as Chinese pessimism improves and if equities remain buoyant.
Current Level: 0.5936
Resistance: 0.6145
Support: 0.5860
Last Weeks Range: 0.5869 – 0.5969