interbank midrate

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

FX News

NZD/USD Transfer

Different week- same result, in the New Zealand Dollar (NZD), US Dollar (USD) cross with the kiwi slipping again to fresh lows around 0.5930 levels. Well under the 0.6000 support line now it’s hard to see the NZD bouncing back with any gusto. The Reserve Bank of New Zealand confirmed they are happy with the current cash rate at 5.50% which has been constraining spending and inflation pressures. Fed minutes suggested they are hanging off rises in unemployment and slower growth in order to bring down inflation to target levels with a recession now on the cards later this year. On the chart the NZD looks into the abyss all the way to 0.5550.

The current interbank midrate is: NZDUSD 0.5936

The interbank range this week has been: NZDUSD 0.5903- 0.5997

FX News

FX Update

Key Points:

  • Interest rate hold expected from the RBNZ tomorrow.
  • Goldman Sachs expects only a 20% chance of a US recession over the next year.
  • The Federal Reserve are expected to leave their cash rate unchanged at the September meeting with cuts predicted mid-2024.
  • Chinese real estate company “Country Garden’s” share price crashed about 20% overnight reigniting the state of the economy’s recession fears.
  • NZ Business Services Index contracted from 49.6 to 47.8 in July.
  • German economic outlook is looking bleak amid a heavy manufacturing recession.
  • The US Dollar (USD) has been the strongest currency this month with the New Zealand Dollar (NZD) the worst performer.
FX News

NZD/USD Transfer

The New Zealand Dollar (NZD) slumped to a 5-week low to 0.6060 against the US Dollar (USD) this week. Friday the kiwi has started a recovery of sorts trading back to 0.6077 as I write but with global headwinds it may struggle to gain much momentum to the north. The NZ job market eased in the second quarter with job participation hitting an all-time high of 72.4% with more than 3M people now employed in the workforce. The unemployment rate rose slightly from 3.4% in the first quarter to 3.6 in the second, the question remains- will this be enough to force the hand of the RBNZ to hold interest rates at their next meeting on August 16th- we suspect not. Tonight’s Non-Farm Payroll (NFP) number is predicted to come in light reflecting an easing to the job’s market. Long term support in the cross is around the 0.6040 to 0.6000 range, recent sentiment suggests this area won’t hold.

The current interbank midrate is: NZDUSD 0.6080

The interbank range this week has been: NZDUSD 0.6061- 0.6226

FX News

AUD/USD Transfer

The Australian Dollar (AUD) fell to a 9-week low against the US Dollar (USD) Thursday extending recent losses to 0.6510. The US 10-year treasury bond yield was up 11 points to 4.19% and nears the October 2022 high. This in turn has seen a selloff in equity markets in August with the capacity to deepen. Not good for risk currencies in the near to medium term. Earlier the Reserve Bank of Australia (RBA) left interest rates on hold Tuesday at 4.10% the central bank suggesting they weren’t done yet dependent on incoming data, the AUD backtracking post the release. Non-Farm Payroll tonight with expectation of a mixed result and a slowdown of jobs data.

The current interbank midrate is: AUDUSD 0.6557

The interbank range this week has been: AUDUSD 0.6514- 0.6739

FX News

AUD/GBP Transfer

Our predictions were correct with the British Pound (GBP) pushing higher from Tuesday’s 0.5240 (1.9080) to reach 0.5140 (1.9460) in early Friday trading. The lowest level since April 2020. The BoE signalled they are close to reaching a top in this tightening cycle later this year but highlighting further persistent pressures remain with taming inflation, consumer spending and strong wages. Earlier the Bank of Australia surprised markets by holding their cash rate at 4.10% against expectation of a hike, maintaining their forward guidance of further tightening required. For now, the Aussie looks down for the count, the worst performing main board currency.

The current interbank midrate is: AUDGBP 0.5157 GBPAUD 1.9391

The interbank range this week has been: AUDGBP 0.5136- 0.5242 GBPAUD 1.9072- 1.9469

FX News

NZD/GBP Transfer

The New Zealand Dollar (NZD) extended midweek losses against the British Pound (GBP) reaching fresh lows around 0.4775 (2.0950) marking a 28-month level in the cross. The Bank of England (BoE) hiked their interest rate 25 points overnight as widely predicted voting 6-3 in favour. The central bank saying they will need to hike again later this year with inflation projections this year still exceedingly high. Earlier in the week NZ job’s data released with the participation rate hitting an all-time high and the unemployment rate clicking higher to 3.6%, up from 3.4% in quarter one. The kiwi looks poorly with further declines on the horizon expected.

The current interbank midrate is: NZDGBP 0.4782 GBPNZD 2.0911

The interbank range this week has been: NZDGBP 0.4771- 0.4844 GBPNZD 2.0643- 2.0959

FX News

NZD/AUD Transfer

The New Zealand Dollar (NZD) has continued to move higher throughout the week reaching 0.9325 (1.0725) against the Australian Dollar (AUD) but it hasn’t been all one-way traffic. Although the cross remains within big picture ranges, movement over the week has certainly not been stagnant. The RBA surprised us by leaving their cash rate unchanged at 4.1% in a hawkish release amid expectation they will raise again down the track. NZ Job’s numbers reached an all-time high with 72.4% of eligible people in the workforce. However, the unemployment rate did jump to 3.6% from 3.45 in the June quarter. This may not be enough for the RBNZ to hold rates at their August 16 meeting, but we should get a better signal when NZ inflation expectations are released on Wednesday. We really do need a big-ticket risk event to shift the NZD/AUD cross out of its long-term range.

The current interbank midrate is: NZDAUD 0.9271 AUDNZD 1.0783

The interbank range this week has been: NZDAUD 0.9231- 0.9318 AUDNZD 1.0732- 1.0832