currency

The New Zealand Dollar (NZD) extended its rally over the second half of the week against the US Dollar (USD reaching 0.6140 as investors sold the greenback. Inflation in the US published bang on expectations of 3.4%, down form 3.5% y/y with markets breathing a sigh of relief sending risk currencies higher. This marks the lowest inflation read since this time in 2021. The fight against inflation is starting to take hold with the economy gradually easing. US Retail Sales for April printed at the same time coming in poor at 0.0% based on expectations of 0.4%. To be fair most of the selling in the USD could have been based on the Retail Sales number and not so much CPI. The pair is trading at an 8-week high and now targets the 0.6200 area of mid-January. Next week’s main data release is RBNZ Official Cash Rate which is expected to remain at 5.50%- the forward outlook will interesting.

The current interbank midrate is: NZDUSD 0.6114

The interbank range this week has been: NZDUSD 0.5993- 0.6139

The New Zealand Dollar (NZD) extended its momentum this week over the Australian Dollar (AUD) reaching 0.9240 (1.0820) the third straight week of bullish continuation. Clearing key resistance at 0.9200 (1.0870) yesterday could signal further moves to the topside over the next while. If we look at the 50% fib level of the yearly low and highs we would expect a retest of the level at 0.9260 (1.0800) then 0.9300 (1.0750) over the coming days. The RBNZ left interest rates on hold at 5.5% this week suggesting inflation is still causing issues meaning interest rates could remain high into early 2025. Earlier expectations were that the central bank could cut as early as August this year- this is now highly unlikely. NZ Retail Sales won’t be helping inflation either publishing at 0.5% compared to a dip of -0.3% predicted in first quarter 2024.

The current interbank midrate is: NZDAUD 0.9230 AUDNZD 1.0826

The interbank range this week has been: NZDAUD 0.9139- 0.9243 AUDNZD 1.0818- 1.0942

The Australian Dollar (AUD) traded into Tuesday to 0.6120 (1.6335), just below the weekly open, the Euro enjoying the weaker sentiment and mixed Chinese CPI data pulling on the AUD. Markets await Australian jobs data tomorrow expected to show a slight rise to 3.9% from 3.8% based on a range of economic indicators reflecting an economy easing and a deterioration of the job’s market. The number of job’s adds in Australia has fallen sharply down to 2021 levels as the demand from employers drops. A retest of 0.6105 (1.6380) looks likely.

Current Level: 1.6345
Resistance: 1.6380
Support: 1.6180
Last Weeks Range: 1.6218- 1.6382

The Australian Dollar (AUD) traded into Tuesday to 0.6120 (1.6335), just below the weekly open, the Euro enjoying the weaker sentiment and mixed Chinese CPI data pulling on the AUD. Markets await Australian jobs data tomorrow expected to show a slight rise to 3.9% from 3.8% based on a range of economic indicators reflecting an economy easing and a deterioration of the job’s market. The number of job’s adds in Australia has fallen sharply down to 2021 levels as the demand from employers drops. A retest of 0.6105 (1.6380) looks likely.

Current Level: 0.6118
Resistance: 0.6180
Support: 0.6105
Last Weeks Range: 0.6104- 0.6165

As we predicted the Australian Dollar (AUD) rallied through to 0.5295 (1.8890) levels late last week against the British Pound (GBP) before giving back gains to 0.5265 (1.9000) into morning trading. The Pound has been well bid off the back of surprisingly good UK data with Industrial Production coming in better than expected with output rising 0.2% in March of 0.1% in February and a fall of 0.5% in January. UK Claimant numbers print tonight and should show around 14,000 people filed for unemployment in April, up from March’s 10,900- this number trending upwards over the past few months. Unemployment also prints in Australia later in the week which should tick up to 3.9%-4.0%

Current Level: 1.9022
Resistance: 1.9100
Support: 1.8900
Last Weeks Range: 1.8898- 1.9034

Yesterday’s NZ inflation expectations release put the New Zealand Dollar (NZD) under pressure against the Euro (EUR) the cross falling to 0.5570 (1.7945) off 0.5595 (1.7880). The 2-year inflation forecast decreased from 2.5% to 2.33% with the 1 year decreasing to 2.73% down from 3.22%. Earlier Lagarde confirmed a rate cut by the European Central Union will happen in the June meeting easing its monetary policy from 4.35%. We expect a slow burn in  the cross back to 0.5650 (1.7700) resistance over the next while.

Current Level: 1.7946
Resistance: 1.8120
Support: 1.7830
Last Weeks Range: 1.7853 – 1.7965

Yesterday’s NZ inflation expectations release put the New Zealand Dollar (NZD) under pressure against the Euro (EUR) the cross falling to 0.5570 (1.7945) off 0.5595 (1.7880). The 2-year inflation forecast decreased from 2.5% to 2.33% with the 1 year decreasing to 2.73% down from 3.22%. Earlier Lagarde confirmed a rate cut by the European Central Union will happen in the June meeting easing its monetary policy from 4.35%. We expect a slow burn in  the cross back to 0.5650 (1.7700) resistance over the next while.

Current Level: 0.5572
Support: 0.5520
Resistance: 0.5610
Last week’s range: 0.5566- 0.5601

After a decent week of improvement for the New Zealand Dollar (NZD) with price extending to 0.4825 (2.0720) late in the week the kiwi has given back most of this move against the British Pound (GBP) to drop back to 0.4790 (2.0870) this morning. NZ’s latest survey of inflation expectations showed a continued moderation in the 2-year forecast which dropped from 2.5% to 2.33% along with the 1 year forecast from 3.22% to 2.73%. This should give relief to the RBNZ as no further hikes should be needed. UK Claimant change should reflect a rise of around 14,000 people to the unemployment numbers in April a rising trend following recent months of numbers looking for work. A retest of 0.4780 (2.0930) this week is our pick.

Current Level: 2.0881
Resistance: 2.1130
Support: 2.0720
Last Weeks Range: 2.0723- 2.0923