JPY

The New Zealand Dollar (NZD) and the British Pound (GBP) have both tracked lower against a basket of currencies over the week, the kiwi faring slightly better over the GBP reaching 0.4670 (2.1425) Wednesday before giving back gains to 0.4635 (2.1570) and roaring back into Friday to 0.4655 (2.1480). UK inflation jumped to 2.3% from 1.7% in October pushed up almost entirely by energy tariffs. A slightly slower pace of rate cuts by the Bank of England (BoE) is now priced in offering thought we may see the Pound higher in coming weeks, especially against the kiwi as we look ahead for the RBNZ to cut rate 50-75 points next week.

The current interbank midrate is: NZDGBP 0.4651 GBPNZD 2.1500

The interbank range this week has been: NZDGBP 0.4624- 0.4667 GBPNZD 2.1423- 2.1625

The New Zealand Dollar (NZD) returned lower off 0.5900 levels midweek against the US Dollar (USD) dropping back to 0.5860 into early Friday. The kiwi struggling post US Election results as the currency hovers around long term lows. Drops through support at 0.5770 and the 2022 low at 0.5500 now comes into the picture. A run through 0.5500 which could only be 1 RBNZ cut away (next week) and it’s a freefall into the abyss. US Manufacturing early tomorrow is predicted to come in solid.

The current interbank midrate is: NZDUSD 0.5854

The interbank range this week has been: NZDUSD 0.5835- 0.5921

The New Zealand Dollar (NZD) finally broke below 0.9000 (1.1110) this morning against the Australian Dollar (AUD), it’s been a long time coming as we forecast this to happen weeks ago. The cross has been sitting between a range of 0.9090 (1.1000) and 0.9020 (1.1090) for 7 weeks straight so a move outside “status quo” has been welcomed. A retest of 0.8970 (1.1150) on the chart looks a possibility the October 2022 low. Looking ahead we have the RBNZ Wednesday with markets predicting a drop to the cash rate of 50 points with a decent chance of a 75-point cut to 4.00%. We are in the 75-point camp.

The current interbank midrate is: NZDAUD 0.8991 AUDNZD 1.1010

The interbank range this week has been: NZDAUD 0.8950- 0.9090 AUDNZD 1.1000- 1.1172

The EUR has suffered the same indignations as all of the ‘Non-Reserve’ currencies and fallen sharply since the US Presidential Election. The Eurozone has been living in recessionary conditions for a long time now and attempts to stimulate the economy, through rate cuts, have yet to show any progress. The cross rate with the NZD has moved little as the USD dominates and drives all currencies, ensuring cross rate volatility remains low.

The current interbank midrate is: NZDEUR .5570 EURNZD 1.7953

The interbank range this week has been: NZDEUR EURNZD

The UK economy has been showing signs of life, since the new Labour Government has assumed power, but much of this is unfolding historical data from the previous Governments economic settings. The UK has slammed the economy with a ‘tax and spend’ budget, which is starting to bear fruit, with GDP numbers contracting, once again. The green-shoots have been nipped in the bud. UK CPI will be released this coming week and if this rises, then the spending portion of the budget, will have unleashed inflation once again. The cross rate with the NZD Dollar has been steady, as falls have been similar in size.

The current interbank midrate is: NZDGBP .4650 GBPNZD 2.1505

The interbank range this week has been: NZDGBP .4595-.4650 GBPNZD

European markets have been attempting to stimulate their way out of recession through loose monetary policy, but growth remains challenging and inflation has reversed recent trend lines lower. The fear of high energy costs, from an escalating war in Europe, only adds to the gloomy economic outlook. The cross rate with the AUD is relatively steady, as all boats sink on a falling tide.

The current interbank midrate is: AUDEUR .6150 EURAUD 1.6260

The interbank range this week has been: AUDEUR .6100 – .6150 EURAUD

The NZD has suffered enormously, post the US Presidential election and the resounding win by Trump. Market confidence has soared and along with it, US equities and the US Dollar. The NZD has plummeted all the way down to 0.5850, following the surge in the reserve currency. The precipitous losses were calmed last week, when Fed Chairman Powell acknowledged there was ‘no hurry’ to cut rates, with Trump pro-growth economic policies.

The current interbank midrate is: NZDUSD .5900

The interbank range this week has been: NZDUSD .5830-.5900

The NZD/AUD cross rate has been moving steadily lower, approaching the key 0.9000 mark. The RBNZ has embarked on a rate cutting program and this is in direct contrast to the RBA Governor, who holds rates higher. The RBA Governor has cited stubborn inflationary pressures remaining in the Australian economy, none less than in fiscal spending. The pressure remains to the downside.

The current interbank midrate is: NZDAUD .9050 AUDNZD 1.1040

The interbank range this week has been: NZDAUD .9000 – .9070 AUDNZD 1.0950 – 1.1050

After weakening off to 0.6135 (1.6300)  levels late last week the Australian Dollar (AUD) has clawed back losses Monday to trade back at 0.6170 (1.6200) against the Euro (EUR) off the back of a collapse in the German coalition Government. Australian jobs numbers release Thursday and should reflect a shift in recent strong “employed” jobs numbers. Until late labour force participation has remained high at 67.2%, this has been creating wage and inflation pressures. This could all be about to change?. We pick a reversal on the cards back to 0.6060 (1.6500) levels.

Current Level: 1.6217
Resistance: 1.6530
Support: 1.6000
Last Weeks Range: 1.6160- 1.6542

After weakening off to 0.6135 (1.6300)  levels late last week the Australian Dollar (AUD) has clawed back losses Monday to trade back at 0.6170 (1.6200) against the Euro (EUR) off the back of a collapse in the German coalition Government. Australian jobs numbers release Thursday and should reflect a shift in recent strong “employed” jobs numbers. Until late labour force participation has remained high at 67.2%, this has been creating wage and inflation pressures. This could all be about to change?. We pick a reversal on the cards back to 0.6060 (1.6500) levels.

Current Level: 0.6166
Resistance: 0.6250
Support: 0.6050
Last Weeks Range: 0.6045- 0.6188