currency

Since last week’s RBNZ cut from 5.50% to 5.25% the New Zealand Dollar (NZD), Australian Dollar (AUD) cross hasn’t done a whole lot sitting around the 0.9080 (1.1015) area over the past few days. We are quite surprised to see the kiwi hold these levels given the overall strength in the AUD with extending highs in commodities, and an unwillingness by the RBA to change policy based on upside risks to inflation. RBA monetary minutes form the last RBA release is later today and should confirm the banks hawkish position. Fib markers suggest technically the pair could struggle to breach .9070 (1.1030) for now. However, if risk sentiment holds positive this should assist the AUD more than the kiwi.

Current Level: 1.0992
Resistance: 1.1135
Support: 1.0940
Last Weeks Range: 1.0900 – 1.1056

Since last week’s RBNZ cut from 5.50% to 5.25% the New Zealand Dollar (NZD), Australian Dollar (AUD) cross hasn’t done a whole lot sitting around the 0.9080 (1.1015) area over the past few days. We are quite surprised to see the kiwi hold these levels given the overall strength in the AUD with extending highs in commodities, and an unwillingness by the RBA to change policy based on upside risks to inflation. RBA monetary minutes form the last RBA release is later today and should confirm the banks hawkish position. Fib markers suggest technically the pair could struggle to breach .9070 (1.1030) for now. However, if risk sentiment holds positive this should assist the AUD more than the kiwi.

Current Level: 0.9092
Resistance: 0.9140
Support: 0.8980
Last Weeks Range: 0.9044 – 0.9147

US University of Michigan Consumer Sentiment came in hot Friday with punters more positive around pending economic conditions in the US. This however didn’t help the US Dollar (USD) any extending declines into the weekly close to 0.6050. The New Zealand Dollar (NZD) has welcomed further “risk on” sentiment Monday rising to 0.6115 into early Tuesday trading. US Equity markets and commodity prices remain elevated. As markets increase bets on the Fed cutting rates in September this could undermine the big dollar in the weeks to come as punters turn away from buying treasury bonds. It’s a quiet week on the economic docket for the cross with only US Manufacturing data and NZ retail Sales to focus on. Buying USD above 0.6100 represents extremely good buying right now with big picture moves predicted to depreciate the kiwi in time.

Current Level: 0.6116
Support: 0.6050
Resistance: 0.6170
Last week’s range: 0.5973- 0.6082

The New Zealand Dollar (NZD) gained on the British Pound (GBP) into Wednesday to 0.4730 (2.1135) but couldn’t hold here. The RBNZ cut the official cash rate from 5.5% to 5.25%, the first cut in 4 years. A surprise to most in the markets but not us, as we called for a cut in the August meet some time back. More cuts are expected in the October and November central bank meetings, the central bank saying with inflation at 3.3% and picked to dip lower over the coming months, inflation will be back within their 1-3% target zone. The 50% fib zone at 0.4650 (2.1500) may offer relief for the kiwi on the downside, however with prior low at 0.4565 (2.19) may end being retested in the coming weeks.

The current interbank midrate is:               NZDGBP 0.4650              GBPNZD 2.1505

The interbank range this week has been:            NZDGBP 0.4650- 0.4731            GBPNZD 2.1136- 2.1503

The RBNZ cut their official cash rate Wednesday from 5.5% to 5.25% in what was the first “cut” in over 4 years. Some say a shock move but we were not surprised as the central bank pivots off existing tightening policy. More cuts are predicted over the coming months, the next meetings in 2024 are October 9 and November 27.The RBNZ citing recent progress in nearly meeting the banks inflation target of 1-3% (currently 3.3%) and weak domestic growth. Orr saying they are heading into a period of low and stable inflation. The release weighed heavily on the New Zealand Dollar (NZD) dropping 3 quarters of a percent into the evening against the US Dollar (USD) and has extended declines heading into Friday trading.

The current interbank midrate is:               NZDUSD 0.5980

The interbank range this week has been:            NZDUSD 0.5973- 0.6082

The New Zealand (NZD) has underperformed this week against the Australian Dollar (AUD) falling from Wednesday’s RBNZ rate release from 0.9160 (1.0915) to 0.9060 (1.1040) into Friday. The RBNZ was picked to raise interest rates in May but held, then in July the central bank started to change direction and rhetoric to cutting rates. The August 14 cut from 5.5% to 5.25% was on our radar but not so much on the wider market opinion as to what was predicted hence the NZD sell off. Aussie unemployment improved the AUD yesterday with the change in employed people rising 58,000 a surprise release after only 20,000 was expected. The Unemployment rate came in slightly higher at 4.2% over 4.1% in line with RBA projections and signalling no shift to easing policy any time soon. Overall, the AUD still has an edge, we believe we will be back in the 80’s over the coming couple of weeks.

The current interbank midrate is: NZDAUD 0.9044 AUDNZD 1.1053

The interbank range this week has been: NZDAUD 0.9046- 0.9174 AUDNZD 1.0900- 1.1054