AUD

The Australian Dollar (AUD) grew another leg higher this week as we expected, flying past resistance at 1.1025 (0.9070) against the New Zealand Dollar (NZD) on its way to post 1.1110 (0.9000) as I write. The RBNZ left the interest rate on hold at 5.5%, no surprise there but with a less than hawkish slant to future policy and the possibility of an extra cut this year possibly in August the NZD was massacred. The kiwi easily the worst performing currency of the main G10 group this week. Selling pressures remain for the NZD passing the 2024 low at 1.1085 (0.9020) we are now clearly in thin air. Buyers of AUD should consider.

The current interbank midrate is: NZDAUD 0.8994 AUDNZD 1.1107

The interbank range this week has been: NZDAUD 0.8997- 0.9122 AUDNZD 1.0962- 1.1114

The Australian Dollar (AUD) reached 0.6250 (1.60) early Monday against the Euro (EUR) amid election uncertainty before pulling back to 0.6225 (1.6060) into Tuesday trading. French and German industrial production data slowed up the Euro before a bout of “risk off flow” kicked in affecting the AUD. Currently we are seeing a push higher from the AUD despite Australian consumer confidence falling to the second lowest result for the year falling 2.3 points on the week. France elections have delivered a hung parliament divided by 3 main parties and alliances to be struck.

Current Level: 1.6061
Resistance: 1.6200
Support: 1.6000
Last Weeks Range: 1.6049- 1.6175

The Australian Dollar (AUD) reached 0.6250 (1.60) early Monday against the Euro (EUR) amid election uncertainty before pulling back to 0.6225 (1.6060) into Tuesday trading. French and German industrial production data slowed up the Euro before a bout of “risk off flow” kicked in affecting the AUD. Currently we are seeing a push higher from the AUD despite Australian consumer confidence falling to the second lowest result for the year falling 2.3 points on the week. France elections have delivered a hung parliament divided by 3 main parties and alliances to be struck.

Current Level: 0.6226
Resistance: 0.6250
Support: 0.6170
Last Weeks Range: 0.6182- 0.6230

We haven’t seen much activity in the Australian Dollar (AUD), British Pound (GBP) cross over the last week, the pair preferring to stay within recent ranges, a surprise given all the geopolitical news of late. The GBP was well bid Monday reaching 1.9040 (0.5250) but has dipped into Tuesday to 1.9000 (0.5265). Markets taking relief from the incoming chancellor Rachel Reeves. Reeve s saying the UK will avoid tax-and spend policies. With the RBA still suggesting they will hike at the August meeting this should give the AUD a boost towards the key level at 0.5290 (1.8900)

Current Level: 1.9000
Resistance: 1.9240
Support: 1.8900
Last Weeks Range: 1.8915- 1.9052

The New Zealand Dollar (NZD) gained on the Euro (EUR) Monday gapping to 0.5685 (1.7590) before slipping back to 0.5660 (1.7670) early Tuesday. Both French and German Industrial Production slowed up the Euro momentum, but the currency remains “bid” in the aftermath of the French elections. No party has secured a majority with a hung parliament. Risks for a Le Pen majority diminished with work to be done by political parties now to form alliances. A retest of the 50% fib level at 0.5630 (1.7770) looks possible, a lot depending on whether the RBNZ is dovish at tomorrow’s meeting.

Current Level: 1.7677
Resistance: 1.7700
Support: 1.7600
Last Weeks Range: 1.7589 – 1.7745

The New Zealand Dollar (NZD) gained on the Euro (EUR) Monday gapping to 0.5685 (1.7590) before slipping back to 0.5660 (1.7670) early Tuesday. Both French and German Industrial Production slowed up the Euro momentum, but the currency remains “bid” in the aftermath of the French elections. No party has secured a majority with a hung parliament. Risks for a Le Pen majority diminished with work to be done by political parties now to form alliances. A retest of the 50% fib level at 0.5630 (1.7770) looks possible, a lot depending on whether the RBNZ is dovish at tomorrow’s meeting.

Current Level: 0.5657
Support: 0.5650
Resistance: 0.5680
Last week’s range: 0.5635- 0.5685

The New Zealand Dollar (NZD) cracked 0.4805 (2.0810) early Monday against the British Pound (GBP) but was unable to hold the top of the range. Certainty around the GBP post-election had the GBP back at 0.4780 (2.0920) in early Tuesday as markets digested fresh stability. The incoming new chancellor Rachell Reeves saying she would build 1.5M homes as she plans to overhaul the planning system. She also said the UK would avoid “tax and spend” policies. The RBNZ meet tomorrow and will retain the cash rate at 5.50%, we are expecting a dovish slant and talk of rate cuts before the end of the year. A retest of the early May 0.4760 (2.10) looks a chance.

Current Level: 2.0907
Resistance: 2.1100
Support: 2.0750
Last Weeks Range: 2.0710- 2.0937

The New Zealand Dollar (NZD) cracked 0.4805 (2.0810) early Monday against the British Pound (GBP) but was unable to hold the top of the range. Certainty around the GBP post-election had the GBP back at 0.4780 (2.0920) in early Tuesday as markets digested fresh stability. The incoming new chancellor Rachell Reeves saying she would build 1.5M homes as she plans to overhaul the planning system. She also said the UK would avoid “tax and spend” policies. The RBNZ meet tomorrow and will retain the cash rate at 5.50%, we are expecting a dovish slant and talk of rate cuts before the end of the year. A retest of the early May 0.4760 (2.10) looks a chance.

Current Level: 0.4783
Resistance: 0.4820
Support: 0.4740
Last Weeks Range: 0.4776- 0.4828

We can see nothing on the radar that could stop the surging Australian Dollar (AUD) clock 1.1025 (0.9070) the 2024 low against the New Zealand Dollar (NZD) over the coming few days. Currently the pair trades at 1.0990 (0.9100) after being at 1.0960 to open the week but the bear trend from early June’s 1.0700 (0.9345) looks well intact. This week’s economic docket is this with just the Reserve Bank of New Zealand (RBNZ) cash rate announcement tomorrow at 2pm. Its widely expected that the central bank will leave the interest rate on hold at 5.50% with punters split as to the future policy. Will the bank be dovish or keep their recent overly hawkish tone. We certainly think they will cut at least once before year end. If we see a dovish slant we could be pricing AUD buys in the 89’s before long.

Current Level: 1.1000
Resistance: 1.1030
Support: 1.0950
Last Weeks Range: 1.0926 – 1.1009