Tuesday October 24th
9:00pm AUD RBA Gov Bullock Speaks
Wednesday October 25th
2:45am USD Flash Manufacturing PMI
Forecast 49.5
Previous 49.8
2:45am USD Flash Services PMI
Forecast 49.9
Previous 50.1
3:00am USD Richmond Manufacturing Index
Forecast 3
Previous 5
1:30pm AUD CPI q/q
Forecast 1.10%
Previous 0.80%
1:30pm AUD CPI y/y
Forecast 5.30%
Previous 5.20%
1:30pm AUD Trimmed Mean CPI q/q
Forecast 1.00%
Previous 0.90% Read more
It’s been all downhill this week for the New Zealand Dollar (NZD) extending declines from 0.4880 (2.0480) to 0.4800 (2.0840) against the British Pound (GBP) into morning trading. UK CPI came in hotter than analysts were expecting Wednesday at 6.7% y/y vs 6.6% forecast. This is unlikely to worry the Bank of England to much heading into their next policy meeting. The uptick in CPI attributed to the rise in fuel costs associated with the conflict in the Middle East. The risk off tone may last a while, setbacks in the GBP should be limited to 2.0380 (0.4910) with UK Retail Sales printing tonight.
The current interbank midrate is: NZDGBP 0.4811 GBPNZD 2.0785
The interbank range this week has been: NZDGBP 0.4797- 0.4884 GBPNZD 2.0475- 2.0846
The Australian Dollar (AUD), British Pound (GBP) traded within recent ranges over the week coming into Friday around 0.5210 (1.9190) just above the weekly open. Although earlier week UK CPI came in hotter than expected this didn’t have much effect, the pound falling away to 1.9070 (0.5245) as support for the Aussie returned. Australian Jobs numbers came in soft with less people employed in September, the Aussie giving back gains to 1.9260. Tonight’s Retail Sales in the UK is expected to print negative around the -0.3% mark which in turn could push the Aussie higher.
The current interbank midrate is: AUDGBP 0.5210 GBPAUD 1.9138
The interbank range this week has been: AUDGBP 0.5186-0.5243 GBPAUD 1.9071- 1.9280
After reaching 0.6390 midweek the Australian Dollar (AUD) has succumbed to a fresh bout of “risk off” sentiment giving back gains reaching 0.6290 against the US Dollar (USD). Geopolitical tensions in the Middle East have intensified creating a wave of safe haven buying of the greenback. Aussie jobs numbers were disappointing with a drop in the unemployment rate from 3.7% to 3.6%. Australia added less jobs than expected in September which has eased pressures on the RBA for a potential hike at their Nov 7 meeting. As its very bear market currently, we recommend buying USD on any decent spike.
The current interbank midrate is: AUDUSD 0.6326
The interbank range this week has been: AUDUSD 0.6295- 0.6392
The Australian Dollar (AUD) extended moves higher in the second part of the week against the New Zealand Dollar (NZD) reaching 1.0840 (0.9225) in what has been the biggest single week rally by the AUD this year after it opened around 1.0640 (0.9400). The kiwi has underperformed across the board, none more than against the AUD. Australian job’s data helped the cause when the economy added fewer jobs in September, the unemployment Rate easing off 3.7% to 3.6%. Punters are now starting to forecast a rate hike at the RBA’s meeting on 7 November unless we see a proper dip in next week’s inflation report. We are seeing some consolidation around the 0.9240 (1.0820) area heading into the weekly bell.
The current interbank midrate is: NZDAUD 0.9231 AUDNZD 1.0826
The interbank range this week has been: NZDAUD 0.9224- 0.9401 AUDNZD 1.0637- 1.0841
Stress around global markets this week has seen the “risk” correlated New Zealand Dollar (NZD) struggle a smidge. Clocking a new daily close for 2023 yesterday at 0.5815 this is the weakest the NZD has traded since October 2022. Tensions are red hot in Gaza with investors waiting to see how things will pan out. We have seen some consolidation heading into Friday with the kiwi recovering to 0.5950. Earlier US Retail Sales surprised, printing much higher than the predicted 0.2% at 0.7% causing a selloff in the bond markets. Chances of the Fed hiking interest rates on Nov 2nd increasing to 50/50. The Israel/Hamas war and humanitarian crisis will no doubt keep the kiwi in a bear mood looking ahead.
The current interbank midrate is: NZDUSD 0.5842
The interbank range this week has been: NZDUSD 0.5815- 0.5928
The Australian Dollar (AUD) broke below 0.6020 (1.6620) late last week on its way to clocking a fresh 4 week low of 0.5990 (1.6700) against the Euro (EUR). Monday’s action has seen a pull back towards 0.6015 (1.6630), the test will be if the Aussie can hold above the key level at 0.6000 (1.6660). This week on the calendar we have Australian employment data Thursday expected to print unchanged at 3.7%. Geopolitical tensions in Gaza are Euro supportive. An Israeli advance on Gaza will almost certainly send the Aussie lower.
Current Level: 1.6661
Resistance: 1.6710
Support: 1.6430
Last Weeks Range: 1.6443 – 1.6703
The Australian Dollar (AUD) broke below 0.6020 (1.6620) late last week on its way to clocking a fresh 4 week low of 0.5990 (1.6700) against the Euro (EUR). Monday’s action has seen a pull back towards 0.6015 (1.6630), the test will be if the Aussie can hold above the key level at 0.6000 (1.6660). This week on the calendar we have Australian employment data Thursday expected to print unchanged at 3.7%. Geopolitical tensions in Gaza are Euro supportive. An Israeli advance on Gaza will almost certainly send the Aussie lower.
Current Level: 0.6002
Resistance: 0.6090
Support: 0.5985
Last Weeks Range: 0.5986 – 0.6081
Risk flow has supported the British Pound (GBP) over the past couple of weeks, the Australian Dollar (AUD) slipping from 0.5305 (1.8850) to 0.5195 (1.9260) this morning. Bank of England’s (BoE) Bailey has said the economic outlook looks “subdued” and that monetary policy is restrictive. We expect more hikes ahead, but what could determine this is tomorrow’s UK inflation read which has been ‘sticky” at best over the past couple of months. We predict a drop to 6.6% y/y down from 6.7% likely to not get the central bank overly excited. A retest to 0.5170 (1.9350) looks likely.
Current Level: 1.9275
Resistance: 1.9350
Support: 1.8950
Last Weeks Range: 1.9045 – 1.9325
Risk flow has supported the British Pound (GBP) over the past couple of weeks, the Australian Dollar (AUD) slipping from 0.5305 (1.8850) to 0.5195 (1.9260) this morning. Bank of England’s (BoE) Bailey has said the economic outlook looks “subdued” and that monetary policy is restrictive. We expect more hikes ahead, but what could determine this is tomorrow’s UK inflation read which has been ‘sticky” at best over the past couple of months. We predict a drop to 6.6% y/y down from 6.7% likely to not get the central bank overly excited. A retest to 0.5170 (1.9350) looks likely.
Current Level: 0.5188
Support: 0.5170
Resistance: 0.5280
Last week’s range: 0.5174 – 0.5250