JPY

The New Zealand Dollar (NZD) pushed up against the US Dollar (USD) into the close to 0.6170 after recovering from areas around 0.6060. The 8-week high at 0.6219 held Friday before falling back to 0.6160 Monday. US Non-Farm Payroll came in well above expectation Friday with 353,000 new jobs being added to the economy in January. This sank the greenback across the board with investors exciting the currency. Markets await Wednesday’s US CPI data release with predictions of no change from 3.1%. We expect prices in the pair to drift back towards the 0.6120 area.

Current Level: 0.6167
Support: 0.6150
Resistance: 0.6200
Last week’s range: 0.6067- 0.6215

The AUD/EUR has been weakening all of 2024, from highs in January of just below 0.6200, to testing of the ‘Big Figure’ of 0.6000, to the downside. The inherent weakness of the commodity currency has driven the fall, while the ECB’s reticence to alter tight monetary policy, is a direct result of the fear of resurgent inflation. Germany is now in recession and many other member states are in the same boat, which has aided in the war on inflation, but at some time, the economic pain must be addressed with pressure to lower interest rates. The question is whether the RBA will blink before the ECB?

Current Level: 0.6043
Resistance: 0.6070
Support: 0.5990
Last Weeks Range: 0.6000- 0.6040

The NZD/EUR cross rate has been dropping most of 2024, falling from the January highs of 0.5730, back to around 0.5600. This has been a product of the weakness of the NZD and the ECB holding steady on monetary policy, as inflation continues to fall. French and German CPI inflation numbers have been steadily falling, but fears of supply pressures, have ensured the ECB holds rates higher for longer.

Current Level: 0.5630
Support: 0.5580
Resistance: 0.5660
Last week’s range: 0.5590- 0.5645

The Bank of England has been very hawkish in their approach to interest rates, holding them at high levels, despite precipitous falls in their inflation levels. This has ensured the strength of the GBP against the NZD, which has weakened from highs of just below 0.5000, to be trading around 0.4800 v the NZD. This downside bias is likely to continue into the near future, as the GBP remains supported by their Central Bank policy.

Current Level: 0.4811
Resistance: 0.4850
Support: 0.4780
Last Weeks Range: 0.4800- 0.4845

The cross rate has reached highs of 0.9450, in the last week or so, leading into the latest RBNZ Rate Decision. The NZ Central Bank’s ‘dovish’ stance has allowed the cross rate to drift off recent highs, to trade around 0.9350. The Australian CPI inflation number, released this week, was in line with expectations. The cross rate was softer due to the RBNZ dovish sentiment, but any ‘hawkish’ stance by the RBA Governor, could see the cross-rate re-test highs.

Current Level: 0.9312
Resistance: 0.9360
Support: 0.9280
Last Weeks Range: 0.9330- 0.9400

The RBNZ left rates unchanged, as expected by markets, this week gone by. The previous CPI inflation reading from NZ, was softer than expected, and this has led to a more ‘dovish’ approach to monetary policy. The NZD tumbled against all currencies, with the prospect of further weakness, as the Fed continues the ‘higher for longer’ mantra.

Current Level: 0.6162
Support: 0.6100
Resistance: 0.6190
Last week’s range: 0.6055- 0.6120

The AUD/EUR has been weakening all of 2024, from highs in January of just below 0.6200, to testing below of 0.6000. The weakness of the cross-rate is partially due to falling commodity prices, but also the uncertainty from the RBA. The ECB meets this week to decide their latest rate decision, where they are projected to leave rates unchanged, but continue with the strongly ‘hawkish’ narrative. This will probably ensure continued downside for the cross-rate.

Current Level: 1.6694
Resistance: 1.6806
Support: 1.6542
Last Weeks Range: 1.6556- 1.6638

The AUD/EUR has been weakening all of 2024, from highs in January of just below 0.6200, to testing below of 0.6000. The weakness of the cross-rate is partially due to falling commodity prices, but also the uncertainty from the RBA. The ECB meets this week to decide their latest rate decision, where they are projected to leave rates unchanged, but continue with the strongly ‘hawkish’ narrative. This will probably ensure continued downside for the cross-rate.

Current Level: 0.5990
Resistance: 0.6045
Support: 0.5950
Last Weeks Range: 0.6010- 0.6040

The AUD has tumbled against the GBP for the whole of 2024, falling from highs of 0.5350 in January, to trade around today’s 0.5125. Interest rate differentials drive this price action and the Bank of England appear committed to their tight monetary policy. The UK is in a technical economic recession, but is showing signs of a recovery, which has given the Bank of England some backbone to hold rates higher. The cross-rate is likely to remain soft.

Current Level: 1.9531
Resistance: 1.9607
Support: 1.9230
Last Weeks Range: 1.9379- 1.9493

The NZD/EUR cross rate opened 2024 trading around 0.5750, but has been in steady decline since. This week the cross-rate traded all the way down to 0.5600, due to the bearish sentiment of the RBNZ, and the possible interest rate cuts predicted. The ECB will announce their latest decision this coming Thursday, where they are expected to leave rates unchanged, but maintain the ‘higher for longer’ stance. The ECB priority is fighting inflation and thus remains ‘hawkish’, although they are coming under immense pressure to cut rates by Q3. The European economies are suffering severe recessionary economic conditions and are calling out for some relief, in the form of interest rate cuts, from the ECB.

Current Level: 1.7841
Resistance: 1.8018
Support: 1.7391
Last Weeks Range: 1.7497- 1.7793