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The New Zealand Dollar (NZD) continued its U turn from last week’s 0.5600 number against the US Dollar (USD) Friday extending to 0.5750. Weaker than expected US Job’s data showed a sharp rise in layoffs, more than double the number reported in January climbing to nearly 1.9M continuing the latest slide in US economic data. Meanwhile global risk sentiment has improved breaking the NZD into the 0.57’s. If this continues into next week we could see the cross post a fresh yearly high at 0.5770. US Non-Farm Payroll releases tonight which could also keep the kiwi ‘bid”. Next week’s US CPI is our key data with markets expecting a small drop from 3.0% to 2.9% y/y.

Current Level: 0.5737
Support: 0.5700
Resistance: 0.5770
Last week’s range: 0.5574 – 0.5758

Big gains in the British Pound (GBP) this week have seen the currency reach 2.2380 (0.4470) in morning trade against the New Zealand Dollar (NZD) not helped by the ANZ Activity outlook ticking down and a serious bout of “risk off” to boot. The cross sits at a key area right now with chances it could clock a fresh new weekly low not seen since early December 2015. The Bank of England (BoE) remained divided over rate cut consensus and the speed of cuts. Cutting 25 points in every quarter over 2025 could till leave the central bank in a compromised “restrictive” position.

The current interbank midrate is: NZDGBP 0.4465 GBPNZD 2.2396
The interbank range this week has been: NZDGBP 0.4464- 0.4557 GBPNZD 2.1940- 2.2397

The ANZ Business Confidence indicator ticked up overnight reading 58.4 in February, the New Zealand Dollar (NZD) neglecting the news downplayed by US Dollar (USD) strength and sympathy for a fall in the AUD/USD. The kiwi dropping hard from 0.5700 levels to 0.5635. US Durable Goods also rose in January 3.1% following 2 straight months of rises also boosting the USD. US GDP data for the 4th quarter came in as expected at 2.3% confirming steady growth with the inflation component hotter at 2.4% vs 2.2% markets were predicting. We think the NZD may be oversold in the low 0.56’s, we pick a reversal on the horizon.

The current interbank midrate is: NZDUSD 0.5631
The interbank range this week has been: NZDUSD 0.5624- 0.5769

Sideways moves over the week have been the theme in the Australian Dollar (AUD), New Zealand Dollar (NZD) cross pivoting around the 0.9030 (1.1075) areas with no real tier 1 data publishing post Monday’s NZ Retail Sales. It has been a very risk averse week with both the kiwi and Aussie both retreating against the greenback. Next week key data is Australian GDP q/q expected to come in around 0.3% for December marking the 13th straight month of positive growth in the Australian economy. Trump’s trade tariffs on China will certainly cause fallout for Australian mining with the likes of Rio Tinto. A softening AUD is forecast.

The current interbank midrate is: NZDAUD 0.9027 AUDNZD 1.106
The interbank range this week has been: NZDAUD 0.9016- 0.9049 AUDNZD 1.1050- 1.1091

The Australian Dollar (AUD) pushed higher against the Euro (EUR) last week as “risk sentiment” improved closing around the 0.6080 (1.6450) area. The Aussie has been giving back gains on fresh buyer mood in the EUR which returned after the anticipated new German CDU/CSU leader Merz vowed to reduce Germany’s dependence on the United States to boost economic growth. The other plus for the euro is the potential news that Ukraine’s Zelensky would be willing to resign if a peaceful resolution of the Russia/Ukraine was offered up.

Current Level: 1.6490
Resistance: 1.6760
Support: 1.6340
Last Weeks Range: 1.6356- 1.6536

The Australian Dollar (AUD) pushed higher against the Euro (EUR) last week as “risk sentiment” improved closing around the 0.6080 (1.6450) area. The Aussie has been giving back gains on fresh buyer mood in the EUR which returned after the anticipated new German CDU/CSU leader Merz vowed to reduce Germany’s dependence on the United States to boost economic growth. The other plus for the euro is the potential news that Ukraine’s Zelensky would be willing to resign if a peaceful resolution of the Russia/Ukraine was offered up.

Current Level: 0.6064
Resistance: 0.6120
Support: 0.5965
Last Weeks Range: 0.6047- 0.6113

The Australian Dollar (AUD) kicked off the week well bouncing back from last week’s slide lower to 0.5045 (1.9830) but regained earlier downside momentum shifting lower to 0.5030 (1.9890) in early Tuesday. Australian GDP prints Wednesday and is predicted to edge higher y/y to  2.6% from 2.5%. Chancellor Reeves thinks the Pound may struggle from the March budget event, the bank could view lower spending as a reason to open up more cuts inline with the BoE recent dovish shift. We expect a retest of 0.5000 (2.000) as the week progresses.

Current Level: 1.9896
Resistance: 2.0000
Support: 1.9610
Last Weeks Range: 1.9743- 1.9896