JPY

As we predicted the Australian Dollar (AUD) rallied through to 0.5295 (1.8890) levels late last week against the British Pound (GBP) before giving back gains to 0.5265 (1.9000) into morning trading. The Pound has been well bid off the back of surprisingly good UK data with Industrial Production coming in better than expected with output rising 0.2% in March of 0.1% in February and a fall of 0.5% in January. UK Claimant numbers print tonight and should show around 14,000 people filed for unemployment in April, up from March’s 10,900- this number trending upwards over the past few months. Unemployment also prints in Australia later in the week which should tick up to 3.9%-4.0%

Current Level: 1.9022
Resistance: 1.9100
Support: 1.8900
Last Weeks Range: 1.8898- 1.9034

Yesterday’s NZ inflation expectations release put the New Zealand Dollar (NZD) under pressure against the Euro (EUR) the cross falling to 0.5570 (1.7945) off 0.5595 (1.7880). The 2-year inflation forecast decreased from 2.5% to 2.33% with the 1 year decreasing to 2.73% down from 3.22%. Earlier Lagarde confirmed a rate cut by the European Central Union will happen in the June meeting easing its monetary policy from 4.35%. We expect a slow burn in  the cross back to 0.5650 (1.7700) resistance over the next while.

Current Level: 1.7946
Resistance: 1.8120
Support: 1.7830
Last Weeks Range: 1.7853 – 1.7965

Yesterday’s NZ inflation expectations release put the New Zealand Dollar (NZD) under pressure against the Euro (EUR) the cross falling to 0.5570 (1.7945) off 0.5595 (1.7880). The 2-year inflation forecast decreased from 2.5% to 2.33% with the 1 year decreasing to 2.73% down from 3.22%. Earlier Lagarde confirmed a rate cut by the European Central Union will happen in the June meeting easing its monetary policy from 4.35%. We expect a slow burn in  the cross back to 0.5650 (1.7700) resistance over the next while.

Current Level: 0.5572
Support: 0.5520
Resistance: 0.5610
Last week’s range: 0.5566- 0.5601

After a decent week of improvement for the New Zealand Dollar (NZD) with price extending to 0.4825 (2.0720) late in the week the kiwi has given back most of this move against the British Pound (GBP) to drop back to 0.4790 (2.0870) this morning. NZ’s latest survey of inflation expectations showed a continued moderation in the 2-year forecast which dropped from 2.5% to 2.33% along with the 1 year forecast from 3.22% to 2.73%. This should give relief to the RBNZ as no further hikes should be needed. UK Claimant change should reflect a rise of around 14,000 people to the unemployment numbers in April a rising trend following recent months of numbers looking for work. A retest of 0.4780 (2.0930) this week is our pick.

Current Level: 2.0881
Resistance: 2.1130
Support: 2.0720
Last Weeks Range: 2.0723- 2.0923

After a decent week of improvement for the New Zealand Dollar (NZD) with price extending to 0.4825 (2.0720) late in the week the kiwi has given back most of this move against the British Pound (GBP) to drop back to 0.4790 (2.0870) this morning. NZ’s latest survey of inflation expectations showed a continued moderation in the 2-year forecast which dropped from 2.5% to 2.33% along with the 1 year forecast from 3.22% to 2.73%. This should give relief to the RBNZ as no further hikes should be needed. UK Claimant change should reflect a rise of around 14,000 people to the unemployment numbers in April a rising trend following recent months of numbers looking for work. A retest of 0.4780 (2.0930) this week is our pick.

Current Level: 0.4789
Resistance: 0.4825
Support: 0.4735
Last Weeks Range: 0.4779- 0.4825

The New Zealand Dollar (NZD) declined off the weekly open to 0.9100 (1.0990) against the Australian Dollar (AUD) but turned bid Tuesday clawing back losses to 0.9115 (1.0970)- perhaps off the back off mixed Chinese inflation data- prices rose in the month of April with the y/y number printing at 0.3% vs 0.1% in March. Of note this morning NZ Card Retail Sales declined -0.4% in April and net migration lost 52,500 people in the year ending March 2024 won’t bode well for the kiwi. Australian unemployment prints Thursday with expectations of a rise to 3.9%, this will be priced into the RBA rate cut curve and more particularly the NZD/AUD if the number comes in benign. We expect a retest of 0.9100 (1.0985) over the next day or so.

Current Level: 1.0973
Resistance: 1.1025
Support: 1.0950
Last Weeks Range: 1.0948- 1.1029

The New Zealand Dollar (NZD) declined off the weekly open to 0.9100 (1.0990) against the Australian Dollar (AUD) but turned bid Tuesday clawing back losses to 0.9115 (1.0970)- perhaps off the back off mixed Chinese inflation data- prices rose in the month of April with the y/y number printing at 0.3% vs 0.1% in March. Of note this morning NZ Card Retail Sales declined -0.4% in April and net migration lost 52,500 people in the year ending March 2024 won’t bode well for the kiwi. Australian unemployment prints Thursday with expectations of a rise to 3.9%, this will be priced into the RBA rate cut curve and more particularly the NZD/AUD if the number comes in benign. We expect a retest of 0.9100 (1.0985) over the next day or so.

Current Level: 0.9105
Resistance: 0.9135
Support: 0.9070
Last Weeks Range: 0.9067- 0.9134

The New Zealand Dollar (NZD), US Dollar (USD) had a quiet finish to the week closing around 0.6015 and has travelled into Tuesday around similar levels. Yesterday’s NZ 2-year  inflation expectations printed at 2.33% down from 2.5% with the 5-year expectation remaining at 2.25%. Unemployment is predicted to rise to 4.9 in 1 year and drop to around 4.79% in two years. All eyes are on Thursday’s US inflation y/y read with the number expected to dip from 3.5% to 3.4%. US presidential elections start in early November, we expect the Fed to have started their rate cutting before then. We predict the kiwi to test the 0.6100 area over the week.

Current Level: 0.6012
Support: 0.5880
Resistance: 0.6060
Last week’s range: 0.5979- 0.6039

The Bank of England (BoE) Kept interest rates on hold overnight at 5.25% as expected with the bank suggesting they may start cuts in August with a weak outlook for growth as projections the economy will only grow just 0.8% in 2024. Inflation is expected to fall to their 2.0% target point over the coming months but may be a rocky road with energy price effects before settling around the 2.0% late in 2025. Agreement over 5.25% wasn’t a given with 2 members wanting to drop rates 25 points to 5.0%, the vote 2-7 in favour of a hold. Prices in the New Zealand Dollar (NZD), British Pound (GBP) extended higher to 0.4820 (2.0750) this morning a fresh 8 week high in the cross. Of note; price sits bang on the 61.8% fib level suggesting we could see a move today back to 0.4800 (2.0830)

The current interbank midrate is: NZDGBP 0.4819 GBPNZD 2.0751

The interbank range this week has been: NZDGBP 0.4779- 0.4825 GBPNZD 2.0723- 2.0922

Tuesday’s RBA interest rate remained unchanged at 4.35% with the RBA a little less hawkish than we were expecting. Prices in the Australian Dollar (AUD), New Zealand Dollar (NZD) ticked higher from 0.9075 (1.1020) to reach 0.9132 (1.0950) early Friday. The RBA will leave interest rates on hold until at least year end with inflation forecasted to be around 2.8% late 2025. If we compare this to NZ inflation forecast which are falling faster its clear to see divergence starting to affect the NZD/AUD. We will get a closer look next week at NZ Inflation Expectations q/q. We are not convinced just yet we have seen the low at 0.9065 (1.1030) in the rear-view mirror, certainly if price breaks 0.9140 (1.0940) we could see further rises for the kiwi.

The current interbank midrate is: NZDAUD 0.9121 AUDNZD 1.0959

The interbank range this week has been: NZDAUD 0.9067- 0.9134 AUDNZD 1.0947- 1.1029