EURO/NZD Transfer

The New Zealand Dollar (NZD) extended losses to close the week out around the 0.5605 (1.7840) zone against the Euro (EUR), caught up in “risk off” sentiment from uncertainty brewing in Gaza. NZ elections over the weekend confirmed a new National led economy is set to take the reins, this boosted the NZD to 0.5635 (1.7750) before falling back to 0.5610 (1.7830) in early morning trade. NZ inflation printed at 1.8% for the quarter ending September confirming a small drop in the year-on-year number from 6.0% to 5.6% with talk the RBNZ will still need to hike one more time prior to year-end. Geopolitical uncertainty is never good for risk currencies, the kiwi is no exception.

Current Level: 1.7898
Resistance: 1.8040
Support: 1.7530
Last Weeks Range: 1.7507 – 1.7855

NZD/EURO Transfer

The New Zealand Dollar (NZD) extended losses to close the week out around the 0.5605 (1.7840) zone against the Euro (EUR), caught up in “risk off” sentiment from uncertainty brewing in Gaza. NZ elections over the weekend confirmed a new National led economy is set to take the reins, this boosted the NZD to 0.5635 (1.7750) before falling back to 0.5610 (1.7830) in early morning trade. NZ inflation printed at 1.8% for the quarter ending September confirming a small drop in the year-on-year number from 6.0% to 5.6% with talk the RBNZ will still need to hike one more time prior to year-end. Geopolitical uncertainty is never good for risk currencies, the kiwi is no exception.

Current Level: 0.5587
Support: 0.5545
Resistance: 0.5705
Last week’s range: 0.5600 – 0.5712

GBP/NZD Transfer

The British Pound (GBP) extended its run higher against the New Zealand Dollar (NZD) reaching 2.0660 (0.4840) around the weekly close, a 3-week high. The kiwi earlier, unable to hold the double bottom area at 2.0270 (0.4935) as risk tone darkened. This morning NZ CPI 3rd quarter printed at 1.8% or 5.6% y/y down from 6.0%, welcomed by the RBNZ, however questions still remain whether the RBNZ will need to hike one more time prior to Christmas. UK CPI is expected to print at 6.6% y/y down from 6.7% with further declines in food inflation and accommodation expected. Imminent attacks on Gaza will suit the GBP.

Current Level: 2.0695
Resistance: 2.0850
Support: 2.0300
Last Weeks Range: 2.0272- 2.0657

NZD/GBP Transfer

The British Pound (GBP) extended its run higher against the New Zealand Dollar (NZD) reaching 2.0660 (0.4840) around the weekly close, a 3-week high. The kiwi earlier, unable to hold the double bottom area at 2.0270 (0.4935) as risk tone darkened. This morning NZ CPI 3rd quarter printed at 1.8% or 5.6% y/y down from 6.0%, welcomed by the RBNZ, however questions still remain whether the RBNZ will need to hike one more time prior to Christmas. UK CPI is expected to print at 6.6% y/y down from 6.7% with further declines in food inflation and accommodation expected. Imminent attacks on Gaza will suit the GBP.

Current Level: 0.4832
Resistance: 0.4925
Support: 0.4800
Last Weeks Range: 0.4840 – 0.4932

AUD/NZD Transfer

Post NZ election results over the weekend sent the New Zealand Dollar (NZD) briefly to 0.9400 (1.0640) against the Australian Dollar (AUD) before the Aussie regained its momentum. This morning’s NZ CPI read for the 3rd quarter 2023 published better than expected at 1.8% shifting the y/y figure from 6.0% to 5.6% and sending the kiwi lower, the cross reaching 0.9315 (1.0735) a late September low. All eyes are now on Australian employment data out Thursday with the unemployment rate expected to remain stable at 3.7%

Current Level: 1.0735
Resistance: 1.0770
Support: 1.0635
Last Weeks Range: 1.0610 – 1.0699

NZD/AUD Transfer

Post NZ election results over the weekend sent the New Zealand Dollar (NZD) briefly to 0.9400 (1.0640) against the Australian Dollar (AUD) before the Aussie regained its momentum. This morning’s NZ CPI read for the 3rd quarter 2023 published better than expected at 1.8% shifting the y/y figure from 6.0% to 5.6% and sending the kiwi lower, the cross reaching 0.9315 (1.0735) a late September low. All eyes are now on Australian employment data out Thursday with the unemployment rate expected to remain stable at 3.7%

Current Level: 0.9307
Resistance: 0.940
Support: 0.9285
Last Weeks Range: 0.9347 – 0.9425

 

NZD/USD Transfer

Worry around the escalation in geopolitical tension is at the forefront of markets at the moment. Israeli planned attacks of Gaza have been delayed for now. The New Zealand Dollar (NZD) has held strong in the wake of weekend Elections results with the National Party set to replace the current labour government. The kiwi reversed last week’s losses Monday from 0.5880 to 0.5930 into Tuesday trading assisted by a positive start in equities. Earlier, US CPI did the damage with a read of 3.7% up from 3.6% y/y. NZ CPI released this morning, coming in at 1.8% for the third quarter of 2023 ending September adjusting y/y inflation down to 5.6% from 6.0%- a step in the right direction. Topside moves for the NZD this week will be tough with uncertainty out there.

Current Level: 0.5899
Resistance: 0.6000
Support: 0.5870
Last Weeks Range: 0.5883 – 0.6054

FX update: Risk on tender hooks

Market Overview

Key Points:

• New Zealand has shifted right as the outgoing Labour Party is hammered as preliminary votes in the 2023 Elections are in, this ends 6 years of Labour Party rule. The new Prime Minister Chris Luxon saying- “people had voted for change”.
• Planned Israeli attacks on Gaza have been delayed.
• Consensus has turned positive in the United States as a looming recession may not be on the cards. The Fed is done raising rates and inflation will continue to soften. Strong labour markets and rising incomes support consumer demand which in turn are fuelling economic growth. Most analysts predict the Fed will start cutting rates in the second half of next year as GDP eases and the unemployment rate rises to potentially 4.4% from 3.8% now.
• The ECB will keep interest rates high for a prolonged period to get inflation back to 2.0%
• NZ CPI third quarter 2023 dips to 5.6% y/y from 6.0% with the largest contributor being food.
• The US Dollar (USD) has been the strongest currency in the past week while the New Zealand Dollar (NZD) has been the worst performer.

AUD/GBP Transfer

The British Pound (GBP) extended early week moves against the Australian Dollar (AUD) reaching 0.6185 (1.9280) this morning, a fresh 4 week low in the cross. Risk off market conditions contributing along with the Pound getting a boost from August GDP figures. GDP released at 0.2% nicely up from July’s -0.6% weakening prospects of the Bank of England hiking in November especially given 3rd quarter growth is predicted to come in broadly flat. Looking into next week we have UK CPI y/y and Australian employment figures.

The current interbank midrate is: AUDGBP 0.5184 GBPAUD 1.9290

The interbank range this week has been: AUDGBP 0.5180- 0.5250 GBPAUD 1.9046- 1.9308

 

 

 

 

 

AUD/USD Transfer

Overnight trading saw a release of US CPI numbers for September y/y coming in above expectations of 3.6% at 3.7% This rallied the US Dollar (USD) against its peers with yields going through the roof. The Australian Dollar (AUD) retreated off 0.6420 sliding to 0.6310 into Friday as the USD was bid higher. Massive chart support at 0.6300 is creeping into play again the 2023 low, I’m not sure the cross can avoid a breakout below this key figure, certainly if Fed members talk up prospects of another hike of interest rates before the end of the year we may see further downside bias continue.

The current interbank midrate is: AUDUSD 0.6316

The interbank range this week has been: AUDUSD 0.6306- 0.6444