currency

The New Zealand Dollar (NZD) held around 0.4810 (2.0800) levels against the British Pound (GBP) for most of the week, the third week the cross has traded sideways. The Bank of England (BoE) could start cutting rates earlier than predicted in August even if wage growth and inflation remain stubbornly above the central bank’s 2.0% inflation target. We have seen the GBP weaken off over the past 5 week’s or so from the 0.4710 (2.1240) level, we expect further action to retest the resistance point at 0.4900 (2.0400) over the next couple of weeks.

The current interbank midrate is: NZDGBP 0.4808 GBPNZD 2.0798

The interbank range this week has been: NZDGBP 0.4798- 0.4828 GBPNZD 2.0712- 2.0840

It’s been a game of two halves this week with the New Zealand Dollar (NZD) reaching 0.6170 from 0.6115 only to drift back to 0.6090 Thursday against the US Dollar (USD). Prelim US GDP came in at 1.3%, higher than the 1.3% forecast and well below the 1.6% from the December quarter. The US economy growing at a slower pace than reported blaming softer consumer spending on goods and services. Repricing of Fed bets on rate cuts are being talked about with their rate cut path now predicted to be less aggressive. We still believe the NZD will keep improving, resistance lies at 0.6200 on the chart. However, with US PCE Inflation index to publish tonight, the feds favourite inflation barometer, which could show sluggish inflation we could see the NZD weaken off.

The current interbank midrate is: NZDUSD 0.6121

The interbank range this week has been: NZDUSD 0.6083- 0.6169

The New Zealand Dollar (NZD) traded to a 10-week high of 0.9260 (1.0800) against the Australian Dolar (AUD) Thursday but was unable to hold the level falling back to 0.9225 (1.0840) in early Friday. Aussie CPI released at 3.6% y/y up from 3.4% confirming interest rates won’t be hiked, rather cuts have been pushed out. Pressure remains to the downside after stalling out bang on the 50% fib level between the high of 0.9460 (1.0570) and low of 0.9075 (1.1020). The New Zealand 2024 budget to June 2024 is in deficit of 13.4B, returning to a surplus of 1.5B in the 2027-28 years. Downwardly revised GDP growth points to rising unemployment tipped to spike around 5.2%. We are picking the cross to revisit the support at 0.9175 (1.0900) in the coming days.

The current interbank midrate is: NZDAUD 0.9225 AUDNZD 1.0830

The interbank range this week has been: NZDAUD 0.9218- 0.9261 AUDNZD 1.0797- 1.0848

The New Zealand Dollar (NZD) sits in a familiar pocket this morning against the US Dollar (USD) after making moves higher yesterday but falling back to 0.6100 areas. Fed minutes suggested the central bank may not be done with their tightening cycle and could still hike rates clearly more hawkish than we were expecting creating USD buying. Earlier the RBNZ kept rates on hold at 5.5% as widely expected due to stubborn domestic inflation, Orr delivering a shock hawkish tone saying the bank remains concerned with domestic pressures and capacity constraints in the economy. Then kiwi spikes half a cent post the release before returning lower. Rate cuts could be now delayed towards the second quarter of 2025. We may see a little NZD strength into the close.

The current interbank midrate is: NZDUSD 0.6088

The interbank range this week has been: NZDUSD 0.6082- 0.6151

The Australian Dollar (AUD) traded to a whisker of the yearly open Monday reaching 0.6170 (1.6212) against the Euro (EUR) before reversing to 0.6145 (1.6270) early Tuesday. Euro financial stability has improved with recession fears waning recently, but markets still remain exposed to geopolitical ongoing risks making the EUR a volatile beast. French and German manufacturing releases later in the week could surprise favourably for the euro.

Current Level: 1.6281
Resistance: 1.6370
Support: 1.6200
Last Weeks Range: 1.6221- 1.6368

The Australian Dollar (AUD) traded to a whisker of the yearly open Monday reaching 0.6170 (1.6212) against the Euro (EUR) before reversing to 0.6145 (1.6270) early Tuesday. Euro financial stability has improved with recession fears waning recently, but markets still remain exposed to geopolitical ongoing risks making the EUR a volatile beast. French and German manufacturing releases later in the week could surprise favourably for the euro.

Current Level: 0.6142
Resistance: 0.6170
Support: 0.6110
Last Weeks Range: 0.6109- 0.6164

The Australian Dollar (AUD) broke below the 2-week recent range this morning against the British Pound (GBP) to 0.5250 (1.9055) targeting the 50% retracement area around 0.5235 (1.9100). All eyes this week will be on UK CPI y/y with predictions the number will drop from 3.2% to 2.1% which will make or break a potential June rate cut. Currently we see rate cut chances at 50/50.  The bank’s target range is 2.0% so we are going to get close, buckle in. UK Retail Sales is later in the week but could surprise lower.

Current Level: 1.9058
Resistance: 1.9200
Support: 1.8890
Last Weeks Range: 1.8906- 1.9034