currency

FX News

AUD/GBP Transfer

Our predictions were correct with the British Pound (GBP) pushing higher from Tuesday’s 0.5240 (1.9080) to reach 0.5140 (1.9460) in early Friday trading. The lowest level since April 2020. The BoE signalled they are close to reaching a top in this tightening cycle later this year but highlighting further persistent pressures remain with taming inflation, consumer spending and strong wages. Earlier the Bank of Australia surprised markets by holding their cash rate at 4.10% against expectation of a hike, maintaining their forward guidance of further tightening required. For now, the Aussie looks down for the count, the worst performing main board currency.

The current interbank midrate is: AUDGBP 0.5157 GBPAUD 1.9391

The interbank range this week has been: AUDGBP 0.5136- 0.5242 GBPAUD 1.9072- 1.9469

FX News

NZD/GBP Transfer

The New Zealand Dollar (NZD) extended midweek losses against the British Pound (GBP) reaching fresh lows around 0.4775 (2.0950) marking a 28-month level in the cross. The Bank of England (BoE) hiked their interest rate 25 points overnight as widely predicted voting 6-3 in favour. The central bank saying they will need to hike again later this year with inflation projections this year still exceedingly high. Earlier in the week NZ job’s data released with the participation rate hitting an all-time high and the unemployment rate clicking higher to 3.6%, up from 3.4% in quarter one. The kiwi looks poorly with further declines on the horizon expected.

The current interbank midrate is: NZDGBP 0.4782 GBPNZD 2.0911

The interbank range this week has been: NZDGBP 0.4771- 0.4844 GBPNZD 2.0643- 2.0959

FX News

NZD/AUD Transfer

The New Zealand Dollar (NZD) has continued to move higher throughout the week reaching 0.9325 (1.0725) against the Australian Dollar (AUD) but it hasn’t been all one-way traffic. Although the cross remains within big picture ranges, movement over the week has certainly not been stagnant. The RBA surprised us by leaving their cash rate unchanged at 4.1% in a hawkish release amid expectation they will raise again down the track. NZ Job’s numbers reached an all-time high with 72.4% of eligible people in the workforce. However, the unemployment rate did jump to 3.6% from 3.45 in the June quarter. This may not be enough for the RBNZ to hold rates at their August 16 meeting, but we should get a better signal when NZ inflation expectations are released on Wednesday. We really do need a big-ticket risk event to shift the NZD/AUD cross out of its long-term range.

The current interbank midrate is: NZDAUD 0.9271 AUDNZD 1.0783

The interbank range this week has been: NZDAUD 0.9231- 0.9318 AUDNZD 1.0732- 1.0832

FX News

Key Points This Week

FX Update

Key Points:

Australian Manufacturing in July 49.6 vs 48.2 expected, with pressures over the past few months easing.

NZ Building Permits for June +3.5% m/m prior -2.2% which is positive, however the number is still down 20% from the June 22 figure.

Chinese media are taking pot shots at Australia again warning of tight ties with the US after the two countries expand military operations together.

US earnings season continues this week with Apple, Amazon and Uber up this week.

German Retail Sales -0.8% vs 0.2% expected in June highlighting poor consumer spending.

July Chinese manufacturing data index (49.3) remains in contraction- the 4th straight month.

The Japanese Yen (JPY) is the strongest performer over the month of July with the US Dollar (USD) the worst performer.