FX News

FX News

AUD/USD Transfer

The Federal Reserve kept rates unchanged late last week at 5.50% but pivoted on policy reflecting a dovish stance. The Fed’s ability to guide the economy to a soft landing is being commended with the timing of rate cuts suggested for 2024 along with key risk management. The chance of further rate hikes are now slim with several rate cuts being priced in from mid-2024. The AUD/USD bounced from 0.6600 levels to 0.6670 around the release. Unemployment rose in November to 3.9% the highest level since May 2022 vs forecast of 3.8%. This sent the Aussie higher again underpinning the recent RBA’s concern of persistent domestic demand. The economy added 61,500 jobs – more than the 11,500 expected. The Aussie has held up well since as equities posted gains, into morning trade around the 0.6700 level just off a 20-week high.

The current interbank midrate is: AUDUSD 0.6702

The interbank range this week has been: AUDUSD 0.6689- 0.6734

FX News

NZD/USD Transfer

The New Zealand Dollar (NZD) shifted higher late in the week against the US Dollar (USD) pushing into the 0.62’s after a massive re-think in Fed sentiment. Price reached 0.6250 as the Fed delivered their unchanged cash rate announcement. The Fed said they would keep rates as they are until mid-2024 when they expect to cut rates around June, possibly twice more before the end of the year. Earlier US CPI printed at 3.1% y/y bang on forecast throwing doubt into whether the Fed would price in cuts. NZ GDP q/q released at -0.3% down on 0.2% expectations, the economy contracting more than markets were forecasting and stoking fears of another recession is on the cards. Have the RBNZ raised rates too much in efforts to aggressively bring down inflation which is still 5.6%. It’s now a strong likelihood the central bank will consider cutting sooner over later in 2024. Through most of 2023 the kiwi has been mostly bearish, we believe we may have seen a shift to a bullish tone over November with pricing reversing off mid 57’s, strong support is now 0.6000.

The current interbank midrate is: NZDUSD 0.6211

The interbank range this week has been: NZDUSD 0.6187- 0.6250

FX News

This Week’s Key Points

Market Overview:

Key Points:

• Direct FX is closed on the statutory holidays but will be open for dealing on the days between Christmas and New Year.
• The cost of living in New Zealand is high with spending this Christmas expected to be well down on previous years.
• The ECB’s Kazimir has suggested the central bank cannot yet declare victory on inflation, it would be a mistake to ease too early.
• Chinese and Russian officials have met in Beijing to enhance macroeconomic policy and economic cooperation solidifying their partnership status.
• North Korea has fired another ballistic missile towards North Korea’s east coast.
• Crude Oil is higher Monday after BP said it was pausing shipments through the Red Sea after attacks on vessels last weekend.
• Germany fears a recession ahead.
• The Japanese Yen (JPY) has been the strongest performer over the past week while the US Dollar (USD) has underperformed.

FX News

Calendar of Economic Releases

Tuesday December 19th
1:30pm AUD Monetary Policy Meeting Minutes
Tentative JPY Monetary Policy Statement
Tentative JPY BOJ Policy Rate
Forecast -0.10%
Previous -0.10%
Tentative JPY BOJ Press Conference

Wednesday December 20th
2:30am CAD CPI m/m
Forecast -0.20%
Previous 0.10%
2:30am CAD Median CPI y/y
Forecast 3.30%
Previous 3.60%
2:30am CAD Trimmed CPI y/y
Forecast 3.30%
Previous 3.50%
2:30am CAD Common CPI y/y
Forecast 4.00%
Previous 4.20%
2:30am USD Building Permits
Forecast 1.46M
Previous 1.49M
2:15pm CNY 1-y Loan Prime Rate
Forecast 3.45%
Previous 3.45%
2:15pm CNY 5-y Loan Prime Rate
Forecast 4.20%
Previous 4.20%
8:00pm GBP CPI y/y
Forecast 4.30%
Previous 4.60% Read more

FX News

AUD/USD Transfer

A solid US jobs report Friday moved the Australian Dollar (AUD) lower against the US Dollar (USD) closing the week around the 0.6570 zone. Non-Farm Payroll showed further jobs were added to the economy in November beating expectations of 184k to 199k, some suggesting the US economy could be setting up for a soft economic landing. Unemployment also came in better than expected at 3.7% after 3.9% was expected pushing investors to buy the greenback. The Fed cash rate will publish Wednesday and should remain at 5.5% but not before key US CPI y/y. Whatever happens will set the tone for the following couple of months for AUD/USD direction.

The current interbank midrate is: AUDUSD 0.6566

The interbank range this week has been: AUDUSD 0.6549- 0.6582

FX News

AUD/GBP Transfer

The Australian Dollar (AUD), British Pound (GBP) cross is still firmly bouncing around within recent ranges and has done so since late September. Into Tuesday the Aussie has improved, trading around the 0.5230 (1.9120) area off 0.5210 (1.9190). On the calendar this week we have Australian employment data and later the Bank of England official cash rate- expected to remain unchanged at 5.25%.

The current interbank midrate is: AUDGBP 0.5226 GBPAUD 1.9135

The interbank range this week has been: AUDGBP 0.5211- 0.5245 GBPAUD 1.9064- 1.9187

FX News

NZD/USD Transfer

The New Zealand Dollar (NZD) underperformed towards the end of the week against the US Dollar (USD) falling to 0.6110 levels as strong US data printed. Into Tuesday morning trade we have seen a small perk up in the kiwi to 0.6130 but topside this week could be tough going. We will get a look at US CPI tomorrow, predicted to dip lower from 3.2% to 3.1%. Anything around 3.2% will almost certainly set the scene for another round of interest rate hikes in order to bring down inflation to Fed target levels. Markets however would love to see a decent fall to bring forward rate cuts forecast for third quarter 2024.

The current interbank midrate is: NZDUSD 0.6120

The interbank range this week has been: NZDUSD 0.6104- 0.6131

 

FX News

NZD/GBP Transfer

The New Zealand Dollar (NZD) extended its decline from 0.4925 (2.0300) Friday against the British Pound (GBP) reaching 0.4860 (2.0570) in late Monday trading. A pullback in risk sentiment was the main reason amid weaker than expected NZ September Manufacturing data. Despite UK inflation outlook being downgraded the GBP still managed to make gains on the kiwi. Into Tuesday we have seen the NZD bounce back post buoyant overnight equities. This week’s docket has NZ GDP and the Bank of England cash rate expected to remain at 5.25%

The current interbank midrate is: NZDGBP 0.4874 GBPNZD 2.0517

The interbank range this week has been: NZDGBP 0.4860- 0.4887 GBPNZD 2.0461- 2.0576

 

FX News

NZD/AUD Transfer

Higher lows followed by higher highs in December continue to dominate the chart in the Australian Dollar (AUD), New Zealand Dollar (NZD) cross. The bull trend from late last week’s 0.9300 level to 0.9340 early this morning could signal further upside for the kiwi. NZ GDP prints Thursday for the third quarter ending September 30 and should highlight modest growth in the economy (0.2%) However, by removing migration the economy is expected to contract over the next 12 months. Aussie unemployment is predicted to increase slightly off 3.7% Thursday.

The current interbank midrate is: NZDAUD 0.9315 AUDNZD 1.0724

The interbank range this week has been: NZDAUD 0.9306- 0.9339 AUDNZD 1.0707- 1.0745

FX News

This Week’s Key Points

Market Overview

Key Points:

• Focus is firmly on US CPI this week with data expected to reflect a small dip to inflation.
• Visitor arrivals to New Zealand in October were 226,000 up 64,300 from the number last October and slightly up on September’s number of 224,900.
• The ECB is not expected to make their first rate cut until the summer of 2024 with the core inflation rate still well above target.
• US Unemployment edges lower with the jobless numbers the lowest since July.
• Israel’s massive air strikes in the northern part of Gaza continue with UN officials saying the situation in Gaza is a humanitarian disaster. More than 18,000 Palestinians have been killed since October 7th with the death toll in Israel standing at only 1,150.
• Bank of Canada keep interest rates on hold at 5.00%
• The Japanese Yen (JPY) has been the strongest performer in the month of December while the Euro (EUR) has been the worst performer.