currency

The New Zealand Dollar (NZD) made up ground against the US Dollar (USD) late in the week bouncing off 0.6070 levels to close a healthy 0.6170. Markets turned risk off over the weekend after the assignation attempt of ex-president Trump sending US yields higher. The kiwi traded lower through 0.6100 back towards 0.6040 as we kicked into Tuesday. NZ CPI for the second quarter ending June has come in at 0.4% from 0.6% in the previous quarter. Year on year has also been trimmed from 4.0% to 3.3% weaker than estimates of 3.5%. The NZD has rallied off the news strangely to the 0.6065 zone but will most likely settle lower over the day.

Current Level: 0.6074
Support: 0.6050
Resistance: 0.6150
Last week’s range: 0.6064- 0.6152

The Reserve Bank of New Zealand (RBNZ) decided to leave their cash rate unchanged at 5.5% as widely predicted for the 8th straight meeting. It was the less than hawkish tone by Governor Orr which sent the kiwi reeling against the US Dollar (USD) falling from 0.6125 to 0.6065 post the release Wednesday. US CPI overnight declined to 3.0% for June y/y from 3.3% coming in below expectations of 3.1%. Fed’s Powell quick to reiterate the job is not done yet with managing inflation with more work to do to combat future stubborn inflation saying he would like to see the number below 2.0% before rate cuts are applied. We see a potential cut in September which could put pressure on the greenback. Next week’s key data comes in the form of NZ CPI for the second quarter expected to print at 3.6% down from 4.0%.

The current interbank midrate is: NZDUSD 0.6086

The interbank range this week has been: NZDUSD 0.6064- 0.6251

The New Zealand Dollar (NZD) has fallen away hard this week against the English Pound (GBP) reaching 0.4710 (2.1230) early this morning after a dovish RBNZ read spooked buyers. RBNZ met Wednesday and left the cash rate at 5.5% as predicted, however the central bank was less hawkish than expected with odds increasing of not 1 but 2 rate cuts later this year predicted. A November cut is almost fully priced in but another earlier cut on the 14 August is now a 50/50 chance. The UK economy grew at 0.4% against 0.2% estimates in May also boosting the GBP. The cross sits at a 10-week low, a push past 0.4705 (2.1260) would signal a fresh yearly low going back to October 2023 levels.

The current interbank midrate is: NZDGBP 0.4712 GBPNZD 2.1222

The interbank range this week has been: NZDGBP 0.4710- 0.4804 GBPNZD 2.0813- 2.1233

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