EUR

The Australian Dollar (AUD) broke below the 2-week recent range this morning against the British Pound (GBP) to 0.5250 (1.9055) targeting the 50% retracement area around 0.5235 (1.9100). All eyes this week will be on UK CPI y/y with predictions the number will drop from 3.2% to 2.1% which will make or break a potential June rate cut. Currently we see rate cut chances at 50/50.  The bank’s target range is 2.0% so we are going to get close, buckle in. UK Retail Sales is later in the week but could surprise lower.

Current Level: 1.9058
Resistance: 1.9200
Support: 1.8890
Last Weeks Range: 1.8906- 1.9034

The New Zealand Dollar (NZD) reached 0.5650 (1.7700) Monday after outperforming the Euro last week from 0.5570 (1.7960) levels. The cross then bounced off key fib 61.8 resistance retreating towards 0.5620 (1.7790) midday Tuesday as risk currencies start to lose favour. Eurozone data in the form of decent French unemployment and ECB’s Schnabel also giving the Euro a boost saying cutting rates in June and July should be treated with care. Wednesday’s RBNZ should hold interest rates at 5.5% with talk over rate cut timings key.

Current Level: 1.7793
Resistance: 1.7900
Support: 1.7700
Last Weeks Range: 1.7715 – 1.7964

The New Zealand Dollar (NZD) reached 0.5650 (1.7700) Monday after outperforming the Euro last week from 0.5570 (1.7960) levels. The cross then bounced off key fib 61.8 resistance retreating towards 0.5620 (1.7790) midday Tuesday as risk currencies start to lose favour. Eurozone data in the form of decent French unemployment and ECB’s Schnabel also giving the Euro a boost saying cutting rates in June and July should be treated with care. Wednesday’s RBNZ should hold interest rates at 5.5% with talk over rate cut timings key.

Current Level: 0.5620
Support: 0.5585
Resistance: 0.5650
Last week’s range: 0.5566- 0.5644

The New Zealand Dollar has outperformed the English Pound (GBP) 3 weeks straight from the yearly low at (0.4705) 2.1257 to trade to 0.4840 (2.0650) late in the week. Into Tuesday we have seen a little weakness in the kiwi with prices back around 0.4810 (2.0800) level. It’s a busy economic docket this week for the pair with RBNZ Wednesday before UK CPI. We don’t expect any change from 5.5% but the rhetoric around timing of cuts could be interesting. UK inflation year on year is expected to come in at 2.1% from 3.2% which will set the tone for the upcoming rate release and a potential cut in the mid-June central bank rate publication. We think a retest at 0.4785 (2.0900) looks possible.

Current Level: 2.0820
Resistance: 2.0900
Support: 2.0650
Last Weeks Range: 2.0650- 2.0892

The New Zealand Dollar has outperformed the English Pound (GBP) 3 weeks straight from the yearly low at (0.4705) 2.1257 to trade to 0.4840 (2.0650) late in the week. Into Tuesday we have seen a little weakness in the kiwi with prices back around 0.4810 (2.0800) level. It’s a busy economic docket this week for the pair with RBNZ Wednesday before UK CPI. We don’t expect any change from 5.5% but the rhetoric around timing of cuts could be interesting. UK inflation year on year is expected to come in at 2.1% from 3.2% which will set the tone for the upcoming rate release and a potential cut in the mid-June central bank rate publication. We think a retest at 0.4785 (2.0900) looks possible.

Current Level: 0.44803
Resistance: 0.4840
Support: 0.4785
Last Weeks Range: 0.4786- 0.4842

The New Zealand Dollar (NZD) outperformed the Australian Dollar (AUD) for the second week running reaching 0.9180 (1.0890) to start the week. The kiwi perhaps a little overbought at these levels falling lower to 0.9150 (1.0930) early this morning. Chinese data at the end of the week came in mixed affecting the AUD with the economy’s recovery looking bumpy. The main even this week is the RBNZ cash rate and statement with expectations that we should see a remain at 5.5%. Talk around the timing of when the central banks first hike could be interesting, we expect a dovish slant and pending cuts to be bought forward. Pressure this week will be on the kiwi.

Current Level: 1.0920
Resistance: 1.1030
Support: 1.0860
Last Weeks Range: 1.0890- 1.0996

The New Zealand Dollar (NZD) outperformed the Australian Dollar (AUD) for the second week running reaching 0.9180 (1.0890) to start the week. The kiwi perhaps a little overbought at these levels falling lower to 0.9150 (1.0930) early this morning. Chinese data at the end of the week came in mixed affecting the AUD with the economy’s recovery looking bumpy. The main even this week is the RBNZ cash rate and statement with expectations that we should see a remain at 5.5%. Talk around the timing of when the central banks first hike could be interesting, we expect a dovish slant and pending cuts to be bought forward. Pressure this week will be on the kiwi.

Current Level: 0.9149
Resistance: 0.9210
Support: 0.9065
Last Weeks Range: 0.9094- 0.9182

The New Zealand Dollar (NZD) fell back Monday from levels around 0.6130 against the US Dollar (USD) to head into Tuesday trading around 0.6100. Risk markets are still well supported in the wash up of the recent US data releases. The RBNZ is the only central bank scheduled this week and will most likely leave their cash rate on hold at 5.5% as inflation is not coming down as fast as desired. We think however the RBNZ will bring forward their easing of rates in a dovish read, the NZ economy is not doing as well as some of the data shows. We expect resistance at the 0.6200 level will hold with the kiwi to slip.

Current Level: 0.6104
Support: 0.6050
Resistance: 0.6200
Last week’s range: 0.5992- 0.6140

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