currency

The New Zealand Dollar (NZD) continued its upward trend Monday as risk markets improved, against the US Dollar (USD) price reached the lofty heights of 0.6106. We expect the kiwi to stall out around these levels as it approaches oversold status in the face of the RBNZ rate announcement tomorrow. A break above 0.6115 could signal a further run north. The key release this week is the RBNZ cash rate and policy statement- we expect the RBNZ to keep the interest rate unchanged at 5.50%. Comments around easing policy and rate cuts will no doubt be on the agenda, if forecasts for future rate hikes are brought back from late next year we could see the kiwi spike. The pair is trading bang on the 50% fib level at 0.6100 we feel price could reverse lower into the close of the week.

Current Level: 0.6101
Resistance: 0.6400
Support: 0.5800
Last Weeks Range: 0.5995 – 0.6085

US Manufacturing Goods Orders came in lower than markets predicted at -5.4% compared to forecast of -3.2% and a long way off September’s 4.6%. This equates to 16B in orders to 279B in October. The US Dollar index fell sharply, and the New Zealand Dollar (NZD) rose post the news to the 0.6060 area. The kiwi has been making a habit of running out of steam around mid-0.60’s- maybe a reflection of investors starting to price in a “no change” to the 5.50% RBNZ cash rate due next Wednesday. Markets will remain fairly sloppy heading into the weekend due to US Holiday volatility.

The current interbank midrate is: NZDUSD 0.6046

The interbank range this week has been: NZDUSD 0.5988- 0.6086

Nothing to see here. The New Zealand Dollar (NZD), Australian Dollar (AUD) traded inside its recent range over the week disrupted by a slow week of liquidity due to US Thanksgiving holiday. The cross traded into Friday around 0.9220 (1.0850) smack in the middle of no man’s land. Next week’s Aussie CPI and RBNZ cash rate releases should get the cross moving, although the central bank is not expected to change from 5.50%. Solid support at 0.9200 (1.0870) has proven difficult to breach, anything south of 0.9175 (1.0900) and punters could target the prior low at 0.9130 (1.0950)

The current interbank midrate is: NZDAUD 0.9222 AUDNZD 1.0835

The interbank range this week has been: NZDAUD 0.9185- 0.9247 AUDNZD 1.0814- 1.0887

The Australian Dollar (AUD), Euro (EUR) has been trading sideways since mid-September with price retesting the long-term low at 0.5940 (1.6840) late in the week. The Aussie recovered off a bunch of various support ending the week on top around 0.5980 (1.6730). Price extended Monday to 0.6010 (1.6650) as the greenback fell out of favour and risk was again supported. A hawkish ECB should assist the Euro this week with comments from Wunsch suggesting the central bank may need to tighten further.

Current Level: 1.6686
Resistance: 1.7000
Support: 1.6500
Last Weeks Range: 1.6632 – 1.6839

The Australian Dollar (AUD), Euro (EUR) has been trading sideways since mid-September with price retesting the long-term low at 0.5940 (1.6840) late in the week. The Aussie recovered off a bunch of various support ending the week on top around 0.5980 (1.6730). Price extended Monday to 0.6010 (1.6650) as the greenback fell out of favour and risk was again supported. A hawkish ECB should assist the Euro this week with comments from Wunsch suggesting the central bank may need to tighten further.

Current Level: 0.5993
Resistance: 0.6060
Support: 0.5880
Last Weeks Range: 0.5938 – 0.6012

The Australian Dollar (AUD) extended Friday’s gains against the British Pound (GBP), the cross reaching 0.5260 (1.9015) Monday as risk markets rallied. Early Tuesday moves suggest a turn of the tide, the Aussie recovering to 0.5240 (1.9090). Bank of England’s Bailey spoke earlier today saying “it’s far too early to be thinking about rate cuts”, inflation risks remain with food price inflation ahead. The Labour market although it softened lately also still remains elevated. We expect the 0.5260 (1.9015) level will be well protected this week and the GBP to be supported.

Current Level: 1.9069
Resistance: 1.9360
Support: 1.9000
Last Weeks Range: 1.9017 – 1.9315