AUD

The EUR has a similar experience to the NZD, following rate cuts from the ECB and the RBNZ. Initial downside, has been replaced by rebuilding in the EUR, as economic confidence returns, with the promise of growth from lower interest rates. The interest rate differentials will probably follow each other, remaining static, which is probably where the cross rate will be.

The current interbank midrate is:              NZDEUR .5650  EURNZD 1.7699

The interbank range this week has been:    NZDEUR .5500 – .5650            EURNZD 1.7699 – 1.8181

The surprising buoyancy of the EUR, following rate cuts from the ECB, has worked to bring the cross rate back toward 0.6100. The ECB has space to continue rate cuts, while the RBA has indicated a penchant, for at least holding rates, at these elevated levels. This should support favourable conditions for the AUD, in terms of the cross-rate, with the EUR.

The current interbank midrate is: AUDEUR .6130 EURAUD 1.6313

The interbank range this week has been: AUDEUR .6050-.6130 EURAUD 1.6313 – 1.6528

The GBP has also shared the experience of the EUR and the NZD, following interest rate cuts, from the Bank of England. The cross rate has been relatively stable and this is likely to continue, if respective Central Banks follow the rate cutting cycle. Positive economic conditions appear to be returning to the ‘Old Country’, but significant challenges remain. There are emerging political risks, domestically and internationally, while the upcoming budget may have a negative impact. The Labour Government is facing difficult choices and possible tax rises, as an option, will not be well received.

The current interbank midrate is: NZDGBP .4760 GBPNZD 2.1008

The interbank range this week has been: NZDGBP .4700 – .4770 GBPNZD 2.0964 – 2.1276

The ECB have cut rates and the interest rate differential with the AUD looks set to increase in the favour of the commodity currency. The AUD/EUR cross fell all the way to 0.5900, only to regain ground, following the August resurgence, to trade up above 0.6050. The commodity demand and interest rate differentials support a stronger AUD on the cross with the EUR.

Current Level: 1.6454
Resistance: 1.6600
Support: 1.6393
Last Weeks Range: 1.6445- 1.6570

The ECB have cut rates and the interest rate differential with the AUD looks set to increase in the favour of the commodity currency. The AUD/EUR cross fell all the way to 0.5900, only to regain ground, following the August resurgence, to trade up above 0.6050. The commodity demand and interest rate differentials support a stronger AUD on the cross with the EUR.

Current Level: 0.6035
Resistance: 0.6100
Support: 0.6000
Last Weeks Range: 0.6010- 0.6040

The Bank of England have cut interest rates, thereby attracting flows to the AUD, commodity currency. The cross rate has not varied too greatly as the GBP undergoes a honeymoon period, under the new Labour Government, and support for the GBP has been improving. This will likely not continue and expect the downward pressure, on the cross, to favour the AUD.

Current Level: 1.9525
Resistance: 1.9800
Support: 1.9230
Last Weeks Range: 1.9267- 1.9531