EUR

The Bank of England meet this week, following the release of the latest UK CPI inflation readings. If inflation continues to tumble, the ‘BofE’ may well hint at pending interest rate cuts, especially in light of the looming National Election. The cross rate has fallen all the way from 0.4950, to below 0.4800, due to inherent KIWI weakness. This may be ameliorated, if the Bank of England decides to embrace rate cuts. Any sign of rejuvenated inflation, will have a sharp impact, in the opposite direction.

Current Level: 0.4750
Resistance: 0.4900
Support: 0.4700
Last Weeks Range: 0.4780- 0.4815

The weakness in the NZD/AUD rate continues, with the cross rate falling to 0.9270. This remains historically high, but has fallen considerably from early 2024 highs, of 0.9450. The cross rate this week will be largely determined by the RBA, in their latest meeting, to be held today, 19 th March. The RBA will almost certainly leave rates unchanged, but the narrative will be crucial. If the RBA remains ‘hawkish’, we could see some more downside, on the NZD cross-rate.

Current Level: 0.9230
Resistance: 0.9400
Support: 0.9200
Last Weeks Range: 0.9272- 0.9334

The reserve US Dollar has rebounded, in conjunction with the reemergence of inflation, in the US. The latest US CPI inflation number reversed the trends that have been consistently lower, and turned positive, in the latest February reading. This was a surprise to markets, but was largely ignored, until the latest PPI Wholesale Inflation indicator confirmed the reversal in the inflation trend. This has added pressure to the Fed, who meet this week, to hold interest rates ‘higher for longer’. The NZD continued to lose ground in the face of the rising reserve, falling back below 0.6100.

Current Level: 0.6060
Support: 0.6000
Resistance: 0.6200
Last week’s range: 0.6080- 0.6175

The New Zealand Dollar (NZD), British Pound (GBP) has consolidated around 0.4810 (2.0800) levels this week but falling into Friday to 0.4790 (2.0830) after a bout of “risk aversion” overnight in equity markets. UK GDP came in bang on expectation at 0.20% for the month of January better than December’s -0.1% showing the country could be making progress out of the doom and gloom. Momentum suggests we could see further moves to the downside towards support at 0.4780 (2.0920)

The current interbank midrate is: NZDGBP 0.4802 GBPNZD 2.0824

The interbank range this week has been: NZDGBP 0.4801- 0.4831 GBPNZD 2.0698- 2.0828

US Retail Sales was a disappointment overnight rising less than expected with a 0.6% print vs 0.8% for March. Equities came off dragging the New Zealand Dollar (NZD) from 0.6160 to 0.6120 in early Friday. Earlier US CPI came in at 3.2% y/y higher than the 3.1% forecast with the Federal Reserve now expected to start cutting rates around midyear. Looking ahead we have the Fed Funds Rate Thursday and NZ GDP q/q. Prices in the cross may drift lower into the close.

The current interbank midrate is: NZDUSD 0.6124

The interbank range this week has been: NZDUSD 0.6120- 0.6183

Rhetoric around the RBA keeping interest rates high until 2025 are doing the rounds and holding the Australian Dollar (AUD) “Bid” against the New Zealand Dollar (NZD). Lower highs followed by lower lows is still the theme on the charts with the Aussie moving into the late 0.92’s challenging late January lows. Governor Bullock says the fight to tame inflation is far from over, the longer it stays above 3% the harder it becomes to massage it lower. Price support at 0.9260 (1.0800) is fast coming into view, a break below here and 0.9130 (1.0950) becomes a chance in the medium term. On the docket next week, RBA cash rate and unemployment rate announcements.

The current interbank midrate is: NZDAUD 0.9309 AUDNZD 1.0738

The interbank range this week has been: NZDAUD 0.9295- 0.9359 AUDNZD 1.0684- 1.0758

Lower highs followed by lower lows represents 2024 moves in the Euro (EUR), Australian Dollar (AUD) cross to date. The trend last week supports further weakness in the Aussie after a bounce off 0.6080 (1.6450) multiple support line to current prices at 0.6055 (1.6515) as I write. A retest of last week’s low is the likely scenario, especially given the breakthrough the 50-day moving average. We have no significant data printing in the pair until NZ GDP on the 21st of March.

Current Level: 1.6531
Resistance: 1.6600
Support: 1.6455
Last Weeks Range: 1.6439- 1.6743

Lower highs followed by lower lows represents 2024 moves in the Euro (EUR), Australian Dollar (AUD) cross to date. The trend last week supports further weakness in the Aussie after a bounce off 0.6080 (1.6450) multiple support line to current prices at 0.6055 (1.6515) as I write. A retest of last week’s low is the likely scenario, especially given the breakthrough the 50-day moving average. We have no significant data printing in the pair until NZ GDP on the 21st of March.

Current Level: 0.6049
Resistance: 0.6080
Support: 0.6025
Last Weeks Range: 0.5972- 0.6083

Big moves in the Australian Dollar (AUD), British Pound (GBP) saw swings from 0.5110 (1.9560) to 0.5190 (1.9270) last week post Aussie GDP release. UK construction came in hot but failed to boost the GBP. Also of note, Chinese import data came in above expectation, the Aussie reacting positively.UK GDP for January prints Wednesday with reports pointing to a rise of 0.2% up from December’s -0.1%. Growth overall has been rising since October with the jobless rate falling. A positive report would ease concerns of a sharp recession. We think a retest of 0.5185 (1.9280) is on the cards this week.

Current Level: 1.9394
Resistance: 1.9500
Support: 1.9290
Last Weeks Range: 1.9273- 1.9568

The New Zealand Dollar (NZD) fell to 0.5600 (1.7870) late last week- nearly reaching the yearly low against the Euro (EUR) before recovering towards the close to 0.5640 (1.7730) levels. The ECB kept their interest rate at 4.5% Friday as widely expected for the 4th time in a row with ECB policy makers in favour of a June rate cut. Discussion of a second rate cut in July was also floated. Although inflation targets are broadly inline the ECB said they would need additional data to steer them in the right direction- wage pressures remain key.

Current Level: 1.7727
Resistance: 1.7820
Support: 1.7630
Last Weeks Range: 1.7623- 1.7862