JPY

The ECB and RBNZ have currently both embarked on an interest rate cutting cycle. They are moving at different velocity, but began from different origins. The ECB raised rates to lower levels and without the enthusiasm of the RBNZ, but are not equally as dovish on monetary policy. High interest rates and the cost of energy have driven their respective economies into recession, which has killed inflation. Therefore, as they operate in tandem, we can expect minimum variation to the cross-rate. The rate is trading around 0.5600.

Current Level: 0.5530
Support: 0.5500
Resistance: 0.5700
Last week’s range: 0.5520- 0.5550

The GBP has suffered at the hands of the US Dollar, as has the KIWI. The improving economic situation in the UK, has driven recent support for the GBP, but the resurgent US Dollar has put paid to the recovery. The upcoming UK Budget may have a huge directional impact on the long-term direction of the currency, as rumours harden regarding tax increases and ‘budget’ deficit increases. Expect the NZD cross rate to trade around current levels.

Current Level: 2.1580
Resistance: 2.2200
Support: 2.1600
Last Weeks Range: 2.1600- 2.1730

The GBP has suffered at the hands of the US Dollar, as has the KIWI. The improving economic situation in the UK, has driven recent support for the GBP, but the resurgent US Dollar has put paid to the recovery. The upcoming UK Budget may have a huge directional impact on the long-term direction of the currency, as rumours harden regarding tax increases and ‘budget’ deficit increases. Expect the NZD cross rate to trade around current levels.

Current Level: 0.4625
Resistance: 0.4500
Support: 0.4600
Last Weeks Range: 0.4615- 0.4645

The NZD/AUD cross rate has been moving steadily lower, approaching the key 0.9000 mark. The RBNZ has adopted an aggressive rate cutting program, while the RBA holds firm, to kill the final remnants of inflation. The interest rate differentials are driving the cross lower and this is likely to continue, unless the RBA abandons its current direction.

Current Level: 1.1030
Resistance: 1.1100
Support: 1.0900
Last Weeks Range: 1.0980 – 1.1050

The NZD/AUD cross rate has been moving steadily lower, approaching the key 0.9000 mark. The RBNZ has adopted an aggressive rate cutting program, while the RBA holds firm, to kill the final remnants of inflation. The interest rate differentials are driving the cross lower and this is likely to continue, unless the RBA abandons its current direction.

Current Level: 0.9045
Resistance: 0.9300
Support: 0.9000
Last Weeks Range: 0.9005 – 0.9080

The decline in the NZD continues, triggered by the RBNZ newfound religion of rate cutting, but accelerated by the surge in the strength of the US Dollar. US Bond Yields have been the story of the week in markets, which continue to defy and contradict the Fed, who aggressively cut rates by 50 basis points, as a US Presidential Election bonus. US 10-Year bonds have surged to 4.25%, despite the Fed’s rate cuts, and clearly dovish monetary stance. This has boosted the reserve and forced the NZD back under 0.6000. The US election is fast approaching, which will influence markets, while other Geo-Political events have the capacity to cause upheaval.

Current Level: 0.6005
Support: 0.5900
Resistance: 0.6200
Last week’s range: 0.5990- 0.6060

The AUD has been hit by a relentless rise in the US Dollar reserve, but has performed relatively well, compared to comparable currencies. The reason is the steadfast tight monetary position the RBA has held, in an attempt to stamp out stubbornly high inflation. The relatively good performance of the OZZY, has been due to monetary policy, and this is likely to continue until the RBA sees a creditable turn in the inflation trend line. The AUD trades around 0.6700.

The current interbank midrate is: AUDEUR 0.6180 EURAUD 1.6181

The interbank range this week has been: AUDEUR 0.6124- 0.6192 EURAUD 1.6148- 1.6327

The actions of the RBNZ, while the corresponding inverse was true, from the RBA. The RBA has seen inflation persist and held the line, holding interest rates ‘higher for longer’. This has ensured that the AUD has remained firmer, despite headwinds, from a relentlessly stronger reserve currency. The closing of the interest rate differential margin has driven the cross rates lower. This is likely to continue, assuming the RBA holds the line on interest rates, as indicated. The cross was driven back to 0.8900, by August, as the dovish RBNZ monetary policy became apparent. It has recovered to above 0.9000, but the downside pressures remain.

The current interbank midrate is: NZDEUR 0.5591 EURNZD 1.7885

The interbank range this week has been: NZDEUR 0.5550- 0.5608 EURNZD 1.7831- 1.8016

The UK economy has been recovering well, economically speaking, since the new Labour Government has been elected. This surprises many, as dire warnings of an economic crises (from the incoming Government) have been accentuated by warnings of fiscal tightening and tax rises. The Bank of England is likely to resume interest rate cuts, which will shadow the ECB and RBNZ. The cross rate is therefore not likely to fluctuate greatly, from current trading levels, around 0.4650.

The current interbank midrate is: NZDGBP 0.4654 GBPNZD 2.1486

The interbank range this week has been: NZDGBP 0.4625- 0.4677 GBPNZD 2.1381- 2.1621

The actions of the RBNZ, while the corresponding inverse was true, from the RBA. The RBA has seen inflation persist and held the line, holding interest rates ‘higher for longer’. This has ensured that the AUD has remained firmer, despite headwinds, from a relentlessly stronger reserve currency. The closing of the interest rate differential margin has driven the cross rates lower. This is likely to continue, assuming the RBA holds the line on interest rates, as indicated. The cross was driven back to 0.8900, by August, as the dovish RBNZ monetary policy became apparent. It has recovered to above 0.9000, but the downside pressures remain.

The current interbank midrate is: NZDAUD 0.9043 AUDNZD 1.1050

The interbank range this week has been: NZDAUD 0.9038- 0.9101 AUDNZD 1.0987- 1.1064