interbank midrate

FX News

NZD/GBP Transfer

We called it. A break above 0.4750 (2.1050) cemented further support for the New Zealand Dollar (NZD) to push higher with price reaching the 5-week high overnight at 0.4775 (2.0950). Softer UK data this week has rate hike expectations declining. The UK jobs report was rather dovish with no real growth over the past few months along with industrial production disappointing. We still however expect the Bank of England (BoE) to hike at next week’s policy meeting from 5.25% to 5.5%- this will be their 15th consecutive hike. We may see GBP strength develop towards the BoE Thursday.

The current interbank midrate is: NZDGBP 0.4761 GBPNZD 2.0951- 2.1003

The interbank range this week has been: NZDGBP 0.4714- 0.4773 GBPNZD 2.0951- 2.1213

FX News

AUD/GBP Transfer

The Australian Dollar (AUD) extended its move higher Monday to 0.5150 (1.9415) vs the British Pound (GBP) easing to 0.5142 (1.945) this morning. Notably the cross has broken the 0.5140 (1.9460) level which could signal further upside for the AUD as the week progresses. UK GDP for July prints this week which could weaken the GBP if we see the forecasted -0.2% reported. Certainly, around these levels buyers of GBP should consider. The long-term trend lower could resume any day.

Current Level: 0.5138
Support: 0.4630
Resistance: 0.4835
Last week’s range: 0.5064 – 0.5137

FX News

AUD/USD Transfer

The Australian Dollar (AUD), US Dollar (USD) stabilised around 0.6380 into the weekly close, the Aussie holding up pretty well in the face of deteriorating recent Chinese data. This week’s action has seen fresh US weakness giving room for risk currencies to push back- the AUD up at 0.6440 in early Tuesday. The recent strength of the “big” dollar is represented by an 8-week rally in the US Dollar Index, the strongest in the past 9 years. With US inflation printing this week expected to come in around 3.6% up from 3.2% y/y this may give the Fed reason to raise cash rate in the November meeting. The long-term bear trend is still the theme in the pair, perhaps a good time to buy USD if you have been waiting for a spike.

Current Level: 0.6427
Support: 0.6350
Resistance: 0.6880
Last week’s range: 0.6356 – 0.6479

FX News

AUD/GBP Transfer

Bank of England officials spoke of a drop to UK inflation and the likelihood of just one more hike to come in September during the week devaluing the Pound (GBP) from 0.5065 (1.9750) to 0.5130 (1.9490) into Friday trading. Tuesday’s RBA rate announcement came and went without fanfare, the RBA retaining their 4.10% interest rate. Australian GDP was also steady at 0.4% in the second quarter in line with estimates bringing back AUD buyers. Next week’s Aussie employment release is our focus, a handy barometer of inflation predictions.

The current interbank midrate is: AUDGBP 0.5112    GBPAUD 1.9561

The interbank range this week has been: AUDGBP 0.5064- 0.5138    GBPAUD 1.9462- 1.9746

 

FX News

AUD/USD Transfer

The RBA left their cash rate unchanged at 4.10% Tuesday, the third leave in a row. The central bank left the door open to further hikes if growth starts to rise again over the second half of the year and inflation remains stubborn. The Australian Dollar (AUD) edged lower post release against the US Dollar (USD) falling from around 0.6460 to 0.6370. The RBA acknowledged the Chinese economy, in particular mining resources which Australia buys massive quantities of, is heading into a period of decline. Australian Trade balance slipped to 8.04B compared to 10.05B expected adding to the uncertainty. Hovering around lows at 0.6370 right now- we are not sure how long the Aussie can tread water.

The current interbank midrate is: AUDUSD 0.6380

 

 

 

 

FX News

NZD/GBP Transfer

The British Pound (GBP) retreated overnight on fresh greenback strength, the New Zealand Dollar (NZD) finding support tracking to 0.4730 (2.1150) a 4-week high. The Bank of England looks increasingly likely to hold their cash rate in November based on comments by Bailey, saying rates are nearing the peak. Analysts are predicting however that the central bank will raise in September by 25 points for the last time. We still expect the NZD to weaken further over the mid-term and retest the prior low at 0.4630 (2.1590)

The current interbank midrate is: NZDGBP 0.4714    GBPNZD 2.1213

The interbank range this week has been: NZDGBP 0.4670- 0.4729    GBPNZD 2.1144- 2.1413

FX News

AUD/GBP Transfer

The Australian Dollar (AUD) closed slightly up on the British Pound (GBP) for the week at the 0.5130 (1.9500) area compared to 0.5100 (1.9620) last week as market moving economic data was non-existent. US employment data was down on expectations Friday helping to boost the Aussie into the close, however apart from this we had very few shifts. The UK economy still has upward pressures on inflation – the highest in the G10, a September 21 hike is not a given at this stage, but chances are the Bank of England may rise from 5.25%. Looking at this week’s docket we have the RBA tomorrow with no change from 4.1% expected.

Current Level: 0.5112
Support: 0.5000
Resistance: 0.5150
Last week’s range: 0.5088 – 0.5133

FX News

AUD/USD Transfer

Today’s RBA cash rate release is the main event this week with the central bank predicted to hold rates at 4.10% for a while longer while they watch closely for economic changes and a reason to resume tightening policy. We don’t expect any real shifts in the Australian Dollar (AUD), US Dollar (USD) over the release. Global risks and inflation still have the cross locked in a downtrend, Friday’s trip to retest the high at 0.6520 was short lived falling back to 0.6460 levels into Tuesday. Tomorrow’s Australian 2nd quarter GDP should print around 0.3%, look for small moves around the release.

Current Level: 0.6455
Support: 0.6350
Resistance: 0.6560
Last week’s range: 0.6399 – 0.6521

FX News

FX Update: RBA focus

Market Overview

Key Points:

• US and Canada holidays create a quiet start to the week.
• Comments from ECB’s Lagarde- It’s critical for central banks to keep inflation expectations anchored. The chances of an ECB hike this month is 30%
• Oil closes at 85.80 the highest since November 2022
• Chinese Govt to create a new body to support the failing private sector as confidence plunges among businesses.
• US Non-Farm Payrolls slowed as the labour market starts to cool off. Unemployment rose from 3.5% to 3.8% suggesting the recent work done by the Federal Reserve is working.
• The New Zealand Dollar (NZD) was the strongest currency last week with the Euro (EUR) the worst performer.

Major Announcements last week:
• US Consumer Confidence Index dips to 106.1 from 114.0
• Australian CPI y/y 4.9% down from 5.4%
• US prelim GDP second quarter 2.1% based on expectations of a 2.4% read
• Chinese Caixin Manufacturing PMI beat estimate of 49.0 coming in at 51.0
• US Unemployment 3.8% vs 3.5% expected

FX News

AUD/GBP Transfer

The GBP has suffered the rising reserve, but persistent and stubborn inflation ensures that Bank of England will continue to raise rates, which will support the GBP, in the short term. The UK operates a substantial interest rate differential benefit, so pressure on the cross rate is to the downside, for the AUD.

Current Level: .5115
Support: .5050
Resistance: .5200
Last week’s range: .5065 – .5140