AUD

The AUD/EUR has been weakening all of 2024, from highs in January of just below 0.6200, to testing of the ‘Big Figure’ of 0.6000, to the downside. The inherent weakness of the commodity currency has driven the fall, while the ECB’s reticence to alter tight monetary policy, is a direct result of the fear of resurgent inflation. Germany is now in recession and many other member states are in the same boat, which has aided in the war on inflation, but at some time, the economic pain must be addressed with pressure to lower interest rates. The question is whether the RBA will blink before the ECB?

The current interbank midrate is: AUDEUR .6018 EURAUD 1.6616

The interbank range this week has been: AUDEUR .5993 – .6066 EURAUD 1.6484 – 1.6684

The Bank of England has been very hawkish in their approach to interest rates, holding them at high levels, despite precipitous falls in their inflation levels. This has ensured the strength of the GBP against the NZD, which has weakened from highs of just below 0.5000, to be trading around 0.4800 v the NZD. This downside bias is likely to continue into the near future, as the GBP remains supported by their Central Bank policy.

The current interbank midrate is: NZDGBP .4822 GBPNZD 2.0738

The interbank range this week has been: NZDGBP .4802 – .4898 GBPNZD 2.0416 – 2.0821

The NZD/EUR cross rate has been dropping most of 2024, falling from the January highs of 0.5730, back to around 0.5600. This has been a product of the weakness of the NZD and the ECB holding steady on monetary policy, as inflation continues to fall. French and German CPI inflation numbers have been steadily falling, but fears of supply pressures, have ensured the ECB holds rates higher for longer.

The current interbank midrate is: NZDEUR .5632 EURNZD 1.7755

The interbank range this week has been: NZDEUR .5605 – .5733 EURNZD 1.7441 – 1.7841

The cross rate has reached highs of 0.9450, in the last week or so, leading into the latest RBNZ Rate Decision. The NZ Central Bank’s ‘dovish’ stance has allowed the cross rate to drift off recent highs, to trade around 0.9350. The Australian CPI inflation number, released this week, was in line with expectations. The cross rate was softer due to the RBNZ dovish sentiment, but any ‘hawkish’ stance by the RBA Governor, could see the cross-rate re-test highs.

The current interbank midrate is: NZDAUD .9360 AUDNZD 1.0684

The interbank range this week has been: NZDAUD .9358 – 9457 AUDNZD 1.0574 – 1.0682

The RBNZ left rates unchanged, as expected by markets, this week gone by. The previous CPI inflation reading from NZ, was softer than expected, and this has led to a more ‘dovish’ approach to monetary policy. The NZD tumbled against all currencies, with the prospect of further weakness, as the Fed continues the ‘higher for longer’ mantra.

The current interbank midrate is: NZDUSD .6092

The interbank range this week has been: NZDUSD .6072 – .6194

We have seen a breakout through the 1.6500 (0.6060) area in the Euro (EUR), Australian Dollar (AUD) pair Monday, the Euro rallying to 1.6600 (0.6025) in morning trade, the Euro clocking a key triple top level. Today’s Australian CPI y/y releases tomorrow and is predicted to come in above December’s 3.4%. This will concern the RBA as they target the 2-3% inflation band but may not be enough to warrant the central bank hiking further, it may just imply they push back rate cuts. Recent ECB speak suggests they are not about to cut any time soon. Watch for a retrace back around the 1.6550 (0.6040) area.

Current Level: 1.6597
Resistance: 1.6620
Support: 1.6475
Last Weeks Range: 1.6450- 1.6537

We have seen a breakout through the 1.6500 (0.6060) area in the Euro (EUR), Australian Dollar (AUD) pair Monday, the Euro rallying to 1.6600 (0.6025) in morning trade, the Euro clocking a key triple top level. Today’s Australian CPI y/y releases tomorrow and is predicted to come in above December’s 3.4%. This will concern the RBA as they target the 2-3% inflation band but may not be enough to warrant the central bank hiking further, it may just imply they push back rate cuts. Recent ECB speak suggests they are not about to cut any time soon. Watch for a retrace back around the 1.6550 (0.6040) area.

Current Level: 0.6025
Resistance: 0.6070
Support: 0.6015
Last Weeks Range: 0.6047- 0.6079

UK Consumer Confidence slipped to -21 from -19 in January coming in well below forecast. This being said the British Pound (GBP) has managed to hold onto gains Monday extending last week’s rally from 1.9190 (0.5210) to 1.9400 (0.5155). Broad based momentum is firmly with the GBP after starting the year at 1.8250 (0.5480). We are picking a retest of the yearly low at 0.5120 (1.9520)  over the coming days as the  current trendline supports. Aussie Retail Sales at the end of the week could give us some AUD upside with predictions of a decent number printing.

Current Level: 1.9409
Resistance: 1.9500
Support: 1.9250
Last Weeks Range: 1.9191- 1.9329