EUR

The New Zealand Dollar (USD) was hammered late Friday loosing over ¾ of a cent against the US Dollar (USD). US jobs data came in mixed, unemployment ticked up to 4.0% from 3.9% but NFP jobs increased a seasonally adjusted 272,000 in May, well above the 182,000 we had expected. This comes as quite the surprise after recent reports of a weakening economy. Interest rate cuts have been adjusted to 1 cut in November 2024 from the original 6 in 2024 which rallied the greenback. The Fed will keep rates unchanged when they meet Thursday however we are expecting more clues as to the Fed’s long term policy predictions and how this may filter through to currency moves. We think downside momentum for the kiwi may continue this week.

Current Level: 0.6124
Support: 0.6050
Resistance: 0.6240
Last week’s range: 0.6100- 0.6214

The New Zealand Dollar (NZD) pushed its way past resistance at 0.4840 (2.0660) this week against the British Pound (GBP) on its way to post 0.4855 (2.0600) in early Friday. The first time in 14 weeks (late Feb) we have seen these prices in the cross. UK construction rose in May, the index reporting 54.7 vs 52.5 expected, the biggest increase in activity in two years. Nevertheless, the UK economy is contracting at a rapid rate with worrying times ahead. We could see further upside in the NZD towards 0.4870 (2.0530) where heavy resistance sits.

The current interbank midrate is: NZDGBP 0.4839 GBPNZD 2.0665

The interbank range this week has been: NZDGBP 2.0605- 2.0757 GBPNZD 0.4817- 0.4853

The New Zealand Dollar (NZD) extended moves higher over the week against the US Dollar (USD) to reach 0.6210 as risk assets continue to do well. The big dollar slumped post ISM manufacturing data contracting in May for the second straight month. The new order index came in at 45.4 falling 3.7% points compared to April. US ADP also contracted in the month of May with numbers at 152,000 compared to 173,000 expected. This in turn led to the US treasury 10 year falling to a 2-month low. All eyes are on tonight Non-Farm Payroll release with expectations of a drop in the number of new people who found employment in May. The cross is trading just below the yearly high of 0.6280 and may find it tough to breach resistance at 0.6220.

The current interbank midrate is: NZDUSD 0.6192

The interbank range this week has been: NZDUSD 0.6118- 0.6214

The New Zealand Dollar (NZD) continues to extend moves higher against the Australian Dollar (AUD) reaching 0.9330 (1.0720) in Thursday trading. Friday prices sit just off this around 0.9305 (1.0750) as I write. Wednesday’s Australian GDP came in lower at 0.1% compared to 0.2% expected surprising markets, the AUD slid further over the news. Governor Bullock making earlier comments suggesting if growth was lower the RBA would consider cutting interest rates. However, she also said post release that if inflation remained sticky the RBA could hike interest rates again if needed. It’s also worth noting that with a slide in iron ore prices and less of a demand in Chinese steel demand of late this has played a part in the weaker AUD. Next week will be quiet on the data front with just Australian unemployment numbers releasing.

The current interbank midrate is: NZDAUD 0.9286 AUDNZD 1.0762

The interbank range this week has been: NZDAUD 0.9232- 0.9325 AUDNZD 1.0723- 1.0831

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