EUR

The Australian Dollar (AUD) lost momentum towards week’s end pulling back from 0.6080 (1.6450) to 0.6035 (1.6570) , prices into Tuesday extended lower to 0.6025 (1.6600) as the Euro (EUR) took charge post last week’s ECB hike. Focus now lies with the time the ECB may hold rates at 4.50% with projections they were going to deliver cuts next year. Although economic considerations have fallen short the underlying labour markets remain robust. Lagarde speaks Thursday before French and German manufacturing. We may see the EUR continue to push higher this week across the board.

Current Level: 0.6023
Resistance: 0.6115
Support: 0.5880
Last Weeks Range: 0.5954- 0.6077

The Australian Dollar (AUD) is drifting around the 0.5200 (1.9240) zone early Tuesday against the British Pound (GBP) having outperformed last week from 0.5115 (1.9550) levels. It’s a big calendar of data on the books this week- the Bank of England (BoE) are predicted to raise interest rates from 5.25% to 5.50% Thursday however CPI releases the day prior which could put a cat amongst the pigeons if the figure is above 7.0% forecast raising questions of further hiking not to mention pushing up the value of the GBP. Baileys post release will be key. UK Retail Sales and Manufacturing print at the end of the week. A push through 0.5225 (1.9140) looks unlikely.

Current Level: 1.9230
Resistance: 1.9900
Support: 1.8975
Last Weeks Range: 1.9194 – 1.9553

With the ECB hiking rates last week from 4.25% to 4.50% this has given the Euro (EUR) new interest as it moves off the low of 1.7950 (0.5570) Friday to 1.8075 (0.5530) into Tuesday trading. We still need to see the pair retest the bottom of the channel at 0.5500 (1.8170) before a signal to further downside arises. Late in the week we have Eurozone manufacturing publishing but before this NZ GDP q/q. With 0.4% expected this should bring NZ out of a technical recession. The 50 day Moving average suggests a downside bias for the kiwi over the week.

Current Level: 1.8066
Resistance: 1.9420
Support: 1.7700
Last Weeks Range: 1.7942 – 1.8251

With the ECB hiking rates last week from 4.25% to 4.50% this has given the Euro (EUR) new interest as it moves off the low of 1.7950 (0.5570) Friday to 1.8075 (0.5530) into Tuesday trading. We still need to see the pair retest the bottom of the channel at 0.5500 (1.8170) before a signal to further downside arises. Late in the week we have Eurozone manufacturing publishing but before this NZ GDP q/q. With 0.4% expected this should bring NZ out of a technical recession. The 50 day Moving average suggests a downside bias for the kiwi over the week.

Current Level: 0.5535
Support: 0.5150
Resistance: 0.5650
Last week’s range: 0.5479 – 0.5573

The New Zealand Dollar (NZD) looked steady Monday trading around the weekly open at 0.4775 (2.0940) against the British Pound (GBP), will the kiwi extend higher for the 5th straight week is the question. If it can get past 0.4800 (2.0850) resistance it has every chance. We have a full week of data announcements in the cross starting with UK CPI Thursday followed by NZ GDP then BoE cash rate release before UK Retail Sales and Manufacturing. NZ GDP is predicted to show 0.4% for the second quarter bringing NZ formally out of a recession, meanwhile UK CPI is predicted to print around 7.0% y/y in August from 6.8% as the Bank of England hike rates from 5.25% to 5.5% in order to stop runaway inflation. We don’t imagine too much upside this week for the NZD BoE, speak will be key.

Current Level: 2.0933
Resistance: 2.1600
Support: 2.0700
Last Weeks Range: 2.0930 – 2.1210

The New Zealand Dollar (NZD) looked steady Monday trading around the weekly open at 0.4775 (2.0940) against the British Pound (GBP), will the kiwi extend higher for the 5th straight week is the question. If it can get past 0.4800 (2.0850) resistance it has every chance. We have a full week of data announcements in the cross starting with UK CPI Thursday followed by NZ GDP then BoE cash rate release before UK Retail Sales and Manufacturing. NZ GDP is predicted to show 0.4% for the second quarter bringing NZ formally out of a recession, meanwhile UK CPI is predicted to print around 7.0% y/y in August from 6.8% as the Bank of England hike rates from 5.25% to 5.5% in order to stop runaway inflation. We don’t imagine too much upside this week for the NZD BoE, speak will be key.

Current Level: 0.4777
Resistance: 0.4840
Support: 0.4630
Last Weeks Range: 0.4714 – 0.4777

The New Zealand Dollar (NZD) started the week as it closed, extending price to 0.9200 (1.0870) against the Australian Dollar (AUD). The chart confirms we are sitting at the top of the bear channel. A break above 0.9220 could confirm further support for the kiwi, we predict a retrace to the lower band at 0.9160 (1.0920). On the docket this week is the RBA minutes from the last monetary policy meeting on the 5th of September, the RBA reinforcing recent rhetoric around rates remaining high for extended periods but reserve the right to hike if data reflects. Lowering rates in 2024 are still on the cards. Later in the week is NZ second quarter GDP- predicted to release around 0.4% bringing the country out of a technical recession.

Current Level: 1.0877
Resistance: 1.0930
Support: 1.0750
Last Weeks Range: 1.0812 – 1.0916

The New Zealand Dollar (NZD) started the week as it closed, extending price to 0.9200 (1.0870) against the Australian Dollar (AUD). The chart confirms we are sitting at the top of the bear channel. A break above 0.9220 could confirm further support for the kiwi, we predict a retrace to the lower band at 0.9160 (1.0920). On the docket this week is the RBA minutes from the last monetary policy meeting on the 5th of September, the RBA reinforcing recent rhetoric around rates remaining high for extended periods but reserve the right to hike if data reflects. Lowering rates in 2024 are still on the cards. Later in the week is NZ second quarter GDP- predicted to release around 0.4% bringing the country out of a technical recession.

Current Level: 0.9187
Resistance: 0.9300
Support: 0.9150
Last Weeks Range: 0.9160 – 0.9248

Profit taking of US Dollar (USD) long positions has pushed up the New Zealand Dollar (NZD) slightly off Monday’s open to 0.5920 as the week gets underway. The kiwi has been stable over the last week and a bit as equity markets assist. The Federal Central Bank is expected to leave interest rates on hold at 5.50% this week with eyes on the Fed’s “dot plot” forecasting which may or not confirm another hike by year’s end. If we see projections for rate cuts in 2024 this may reverse some of the September gains the USD has made, remember the greenback has been the strongest currency since early August. For now, the big dollar is still in charge, but things could change in a wink.

Current Level: 0.5916
Resistance: 0.6380
Support: 0.5850
Last Weeks Range: 0.5878 – 0.5942

Market Overview

• New Zealand is predicted to formally come out of its 2-quarter recession this Thursday when forecasts for a 0.4% number are released for the second quarter 2023. First quarter 2023 was -0.1%
• ECB doesn’t rule out further rate hikes.
• Australian inflation predictions are back below levels prior to the start of the Ukraine war, however rising gasoline prices have the capacity to impact heavily.
• The Fed will hold rates this week amid easing inflation and a softening labour market, however the Federal Reserve faces 3 issues going forward which could derail their expectations of a spongy landing. The Fed holds rates too long before cutting, energy prices rise, and economic growth takes off again.
• New Zealand Services sector (a survey of business conditions) has fallen again in August- the third straight month with the index at 47.1 down 0.9 points from July, the lowest level since January 2022 confirming little hope of recovery.
• The English Pound (GBP) has been the strongest currency in 2023 with the Japanese Yen (JPY) the worst performer.