AUD

This week’s Bank of England (BoE) policy statement and official Cash Rate holds centre stage on the calendar with expectations the central bank will maintain their hold of 5.25%. We are predicting a less hawkish approach from the Bank of England which has possibly given rise to the New Zealand Dollar (NZD) of late. Prices in the pair have come back a long way from mid last week’s 0.4705 (2.1250) level to this morning’s 0.4785 (2.0890) bouncing off the Fib 50% level at 0.4805 (2.0820) of note. With risk sentiment still good we could see a push back into the 48’s this week.

Current Level: 0.4781
Resistance: 0.4805
Support: 0.4770
Last Weeks Range: 0.4705- 0.4800

The New Zealand Dollar (NZD) is still underperforming against the Australian Dollar (AUD) sitting just off the yearly bottom of 0.9070 (1.1026) at 0.9078 (1.1015) the 11-month low as I write. The kiwi had a good run higher late last week but was unable to hold levels around 0.9115 (1.0970). A hawkish slant at today’s RBA meeting could be the catalyst for the Aussie strength of late with prospects of a hike not outside the realms of probability. Even if the RBA maintain their 4.35% the rhetoric could be centered around high inflation. The next rate cut is forecast for November at the earlier, there is a chance this could get pushed out. If this happens we would almost certainly see further strength in the AUD and a look at 0.9000 (1.1110)

Current Level: 1.1020
Resistance: 1.1050
Support: 1.0900
Last Weeks Range: 1.0958- 1.1026

The New Zealand Dollar (NZD) is still underperforming against the Australian Dollar (AUD) sitting just off the yearly bottom of 0.9070 (1.1026) at 0.9078 (1.1015) the 11-month low as I write. The kiwi had a good run higher late last week but was unable to hold levels around 0.9115 (1.0970). A hawkish slant at today’s RBA meeting could be the catalyst for the Aussie strength of late with prospects of a hike not outside the realms of probability. Even if the RBA maintain their 4.35% the rhetoric could be centered around high inflation. The next rate cut is forecast for November at the earlier, there is a chance this could get pushed out. If this happens we would almost certainly see further strength in the AUD and a look at 0.9000 (1.1110)

Current Level: 0.9067
Resistance: 0.9175
Support: 0.9050
Last Weeks Range: 0.9069- 0.9125

The New Zealand Dollar (NZD), US Dollar (USD) opened the week around 0.6010 and has hovered around this level in thin market conditions. Although the cross has pushed up from the 0.5880 area its still trading in a bear channel and could ease back again over the week. We would need a break above 0.6100 numbers to confirm a proper shift north. Non-Farm Payroll numbers were a miss Friday with only 175,000 jobs added to the workforce with the unemployment ticking up to 3.9% from 3.8% in March. The Fed may indeed end up cutting rates over the following months with this data reiterating an economy which is easing faster than predicted. The economic docket is light this week which could indicate low volatility.

Current Level: 0.6005
Support: 0.5877
Resistance: 0.6050
Last week’s range: 0.5873- 0.6046

The New Zealand Dollar NZD) extended its mid-week comeback against the British Pound (GBP) coming off 0.4705 (2.1250) to post 0.4760 (2.1000). We suggested we may see a come back of sorts late in the week but not to this extent. Earlier NZ employment data showed a further softening to the job’s market in the first quarter of 2024 with the unemployment rate rising to 4.3% from 4.0%, in line with the RBNZ’s forecast and won’t offer anything new for the RBNZ guidance. On the calendar- Next week’s Bank of England (BoE) official rate announcement is predicted to stay unchanged at 5.25%.

The current interbank midrate is: NZDGBP 0.4754 GBPNZD 2.1034

The interbank range this week has been: NZDGBP 0.4704- 0.4773 GBPNZD 2.0951- 2.1258

The Federal Reserve kept their interest rate at the highest level in over 2 decades yesterday blaming inflation setbacks for the “higher for longer” mantra. A wait and see approach which could last many months to come if we don’t see a marked weakening of the US economy. The New Zealand Dollar (NZD) reversed off 0.5870 reaching the 0.5960 level in early Friday trading and now targets the early week high at 0.5985. Assisting the kiwi was US equity markets rising over 1.0% in the NY session post the Powell speech. The Fed also saying they were committed to reducing their 7.4 trillion asset portfolio as rate hikes were off the table. Tomorrow mornings US Non-farm Payroll and unemployment rate will move prices.

The current interbank midrate is: NZDUSD 0.5963

The interbank range this week has been: NZDUSD 0.5872- 0.5983

The New Zealand Dollar (NZD) retreated again against the Australian Dollar (AUD) to clock 0.9070 (1.1025), dropping 9 out of the last 10 weeks. A weekly close below 0.9075 (1.1020) would register the lowest level since October 2022 for the cross. RBA’s Kearns was on the wires with hawkish comments saying the RBA has been far to timid in raising rates, Aussie dwellings approvals were a miss coming in at 1.9% vs 3.5% in March the release not able to dampen the spirits of AUD buyers. Next week’s RBA cash rate release will be interesting with a 50/50 prediction of whether the RBA will hike or hold interest rates. Buyers of AUD may want to consider current levels before the possibility the cross dropping into the 80’s.

The current interbank midrate is: NZDAUD 0.9069 AUDNZD 1.1016

The interbank range this week has been: NZDAUD 0.9069- 0.9124 AUDNZD 1.0960- 1.1026

The Euro (EUR) climbed to 1.6495 (0.6062) overnight against the Australian Dollar (AUD) as risk mood deteriorated with the Fed meeting looming. The cross has bounced off fib 61.8% support and sits around the 50% fib zone of the high at 0.6135 (1.6300) and the low of 0.6020 (1.6615) suggesting subsequent moves could be towards 0.6085 (1.6430) today. With no further tier one data on the docket in the cross this week moves should be “risk” corresponding.

Current Level: 1.6469
Resistance: 1.6600
Support: 1.6150
Last Weeks Range: 1.6347- 1.6610