interbank midrate

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

FX News

AUD/USD Transfer

The AUD has plunged all the way down to below 0.6400, suffering the weight of a resurgent US Dollar. This is likely to continue, as US inflation remains stubbornly high. Domestic markets will be focused on the RBA in the coming week, as they reveal their latest monetary policy decision. The RBA is expected to hold rates unchanged, but close attention will be paid to the narrative. It is likely to warn of hotter inflationary conditions. The RBA has ‘paused’ rate rises, as a direct result of intense political pressure, maintaining rates at lower levels than most Western Central banks. The premature pause has left the RBA vulnerable, as interest rate differentials offer selling opportunities. Downside pressures remain.

Current Level: .6478
Support: .6405
Resistance: .6510
Last week’s range: .6390 – .6480

FX News

NZD/GBP Transfer

The GBP had suffered a fairly substantial correction downwards, but has staged a small recovery, over the last week or so. Inflationary pressures remain strong in the UK, boosting the likelihood of further interest rate rises, from the Bank of England. This will lend further support for the GBP, over the short term, and downward pressure on the cross-rate.

Current Level: .4709
Support: .4650
Resistance: .4750
Last week’s range:.4685 – .4720

FX News

NZD/AUD Transfer

The NZD/AUD cross rate remains fairly stable around 0.9200. Volatility in the NZD has been reflected on the opposite side of the Tasman, reducing any break-out fluctuations. All eyes will be focused on this coming weeks RBA, interest rate decision. They are expected to hold rates unchanged, but the associated commentary will be closely watched. Warnings of hotter inflation, will spook markets, especially considering the discount with which the environment Australian interest rates are operating in.

Current Level: .9202
Support: .9120
Resistance: .9225
Last week’s range:.9150 – .9210

FX News

NZD/USD Transfer

The NZD/USD has been subject to the machinations of the reserve currency, the US Dollar. The Jackson Hole Symposium, closing out last week, shed no new light on monetary policy. Fed Chairman Powell continued to warn of high inflation and further possible interest rate rises. Par for the course. PCE readings of inflation this week, confirmed it remained stubbornly high, increasing the risk of further rate rises. The NZD has plunged all the way back to 0.5900 and looks likely to remain under pressure, while the USD is supported by rising interest rates.

Current Level: .5962
Support: .5900
Resistance: .5990
Last week’s range: .5900 – .5980

FX News

FX Update: Risk assets hold ground

Market Overview

Key Points:

• Bank of America is forecasting 75 points of rate cuts in 2024, the first around June.
• US authorities are becoming increasingly sure that Wagner boss Prigozhin has died in the recent plane crash.
• Former US president Donald Trump’s trial for election interference has been set for 4th March 2024
• China has ditched the last of their travel restrictions with travellers not having to take a test 48 hours prior to entry into the country.
• The US Dollar (USD) has been the strongest currency over the month of August with the New Zealand Dollar (NZD) underperforming, the worst performer.

Major Announcements last week:
• US Home Sales q/q -1.0% vs -1.6% previous
• UK Manufacturing drops to 6 month low
• UoM Consumer Sentiment 69.5 vs 71.2
• French Manufacturing 46.4 in July vs 42.8 predicted

FX News

NZD/AUD Transfer

As we said earlier the Australian Dollar (AUD) came under pressure, but it wasn’t until late Wednesday we saw a shift off 0.9210 (1.0860) levels back to 0.9235 (1.0830). NZ Retail Sales disappointed in the June quarter coming in at -1.0% vs -0.4% the 3rd consecutive decline representing consumers leaving money in their pocket, the biggest contributor being food and beverage with the sector struggling. On the whole, the pair remains well within recent ranges. Next week’s economic docket looks super thin, more of the same looks to be the likely theme.

The current interbank midrate is: NZDAUD 0.9225    AUDNZD 1.0833

The interbank range this week has been: NZDAUD 0.9192- 0.9266    AUDNZD 1.0792- 1.0879