The long range trend in the Australian Dollar (AUD) continues to dominate the chart, the currency continuing to outperform the New Zealand Dollar (NZD) over the last 6 weeks. The cross clocking an August 2020 level of 0.9100 (1.0990) Thursday before falling back to 0.9130 (1.0950) earlier today. Growth momentum in the Australian economy is starting to look positive with GDP forecast to be around 5.5% this year driven by massive spending by households. Towards year end this will slow with interest rates expected to be hiked leading into a subdued 2023. NZ Inflation rose to a 30 year high of 6.9% this week confirming more interest rate hikes on the horizon. The NZD was broadly up post release but was sold off in the hours after. A hike of 50 points instead of 25 in the May meeting looks all but factored in. With commodity prices roaring it’s hard to see any downside developing in the AUD for a while although we predict 0.9000 (1.1100) should hold.
The current interbank midrate is: NZDAUD 0.9126 AUDNZD 1.0947
The interbank range this week has been: NZDAUD 0.9095- 0.9195 AUDNZD 1.0875- 1.0995