JPY

We were bang on with our predictions last week with movement in the British Pound (GBP), Australian Dollar (AUD) with price easing lower off 0.5250 (1.9050) to 0.5220 (1.9160) at the close of the week. Despite geopolitical news in the cross dampening the mood in markets the Aussie has ignored the brief shifting higher on a risk/equity rally to 0.5245 (1.9070) Tuesday. A move above 0.5250 (1.9050) would signal further upside. We think the likelihood is low with consideration of the geopolitical scene.

Current Level: 1.9080
Resistance: 1.9700
Support: 1.8900
Last Weeks Range: 1.8923 – 1.9221

The New Zealand Dollar (NZD) has largely ignored global tensions developing in the Gaza strip. Monday’s risk markets held the power, the kiwi rallying to 0.5700 (1.7540) this morning from 0.5655 (1.7680) against the Euro (EUR) as US Equities closed up 0.6% in overnight trading. This equals a 12-week high in the cross. Upside moves this week are looking fairly exhausted extending to 0.5715 (1.7500) when considering offshore risks developing.

Current Level: 1.7543
Resistance: 1.8400
Support: 1.7390
Last Weeks Range: 1.7582 – 1.7821

The New Zealand Dollar (NZD) has largely ignored global tensions developing in the Gaza strip. Monday’s risk markets held the power, the kiwi rallying to 0.5700 (1.7540) this morning from 0.5655 (1.7680) against the Euro (EUR) as US Equities closed up 0.6% in overnight trading. This equals a 12-week high in the cross. Upside moves this week are looking fairly exhausted extending to 0.5715 (1.7500) when considering offshore risks developing.

Current Level: 0.5700
Support: 0.5750
Resistance: 0.5435
Last week’s range: 0.5611 – 0.5687

The New Zealand Dollar (NZD) has pushed past resistance at 0.4900 (2.0400) against the British Pound (GBP) Monday on its way to clock 0.4920 (2.0320) as we head into Tuesday trading. A move through 0.4935 (2.0270) could signal further support in the kiwi all the way to 2/1 (0.5000). With the British economy now slowing based on rising interest rates having an effect on the economy, employment is expected to also rise thus we see further hikes from the Bank of England unlikely. With predicted rises in NZ inflation this has opened the door for another RBNZ hike and upside for the NZD.

Current Level: 2.0308
Resistance: 2.1390
Support: 2.000
Last Weeks Range: 2.0287- 2.0583

The New Zealand Dollar (NZD) has pushed past resistance at 0.4900 (2.0400) against the British Pound (GBP) Monday on its way to clock 0.4920 (2.0320) as we head into Tuesday trading. A move through 0.4935 (2.0270) could signal further support in the kiwi all the way to 2/1 (0.5000). With the British economy now slowing based on rising interest rates having an effect on the economy, employment is expected to also rise thus we see further hikes from the Bank of England unlikely. With predicted rises in NZ inflation this has opened the door for another RBNZ hike and upside for the NZD.

Current Level: 0.4924
Resistance: 0.5000
Support: 0.4675
Last Weeks Range: 0.4858 – 0.4930

The New Zealand Dollar (NZD), Australian Dollar (AUD) extended moves Monday reaching 0.9410 (1.0625) before easing back to 0.9395 (1.0640) into Tuesday. The kiwi continues to be well supported as the “carry trade” wins out, the NZD a more attractive buy based on cash rate return. This week’s data releases is slim pickings with only Australian Business Confidence publishing. A retest of resistance seen at 0.9460 looks a chance depending on next week’s key employment and CPI publishing.

Current Level: 1.0642
Resistance: 1.0900
Support: 1.0554
Last Weeks Range: 1.0648 – 1.0742

The New Zealand Dollar (NZD), Australian Dollar (AUD) extended moves Monday reaching 0.9410 (1.0625) before easing back to 0.9395 (1.0640) into Tuesday. The kiwi continues to be well supported as the “carry trade” wins out, the NZD a more attractive buy based on cash rate return. This week’s data releases is slim pickings with only Australian Business Confidence publishing. A retest of resistance seen at 0.9460 looks a chance depending on next week’s key employment and CPI publishing.

Current Level: 0.9391
Resistance: 0.9475
Support: 0.9175
Last Weeks Range: 0.9309 – 0.9391

Rallying equity prices boosted the New Zealand Dollar (NZD) Monday in the face of Geopolitical tensions developing in Israel. The kiwi pushed above pivotal 0.6000 early this morning against the US Dollar (USD) clocking 0.6025 as I write. If we get a daily close above this area this will be the first time since early August offering further momentum to the topside. Later in the week however if the situation in Israel worsens we could see offsetting losses develop. Buying USD over 0.6000 looks decent buying right now all things considered. US CPI y/y prints Friday the main news for the week, expectations are for a small drop to 3.6%, perhaps not enough for the Fed to leave rates on hold at their November 2 meeting.

Current Level: 0.6031
Resistance: 0.6200
Support: 0.5850
Last Weeks Range: 0.5871 – 0.6006

Market Overview

Key Points:

• Weekend attacks in the Gaza Strip fuel geopolitical tensions
• The US Military is supplying air defences, munitions and security assistance to Israel in response to the massive attack by Hamas terrorists.
• Crude Oil has surged to over 84.00 per barrel as the battle in Israel takes hold. The Israeli prime minister Netanyahu said he has no choice but to launch assaults.
• The war in Israel could lead to “safe haven” buying of Gold and the greenback.
• The ECB are saying that rapid rate rises are behind them, convinced that they are “done” rising as the economic picture improves.
• The Japanese Yen (JPY) has been the strongest currency this month while the Australian Dollar (AUD) has been the worst performer.

The New Zealand Dollar (NZD) recovered off 0.5870 midweek post the RBNZ meeting reversing losses against the US Dollar (USD) to 0.5965 into Friday. Despite dovish comments from the RBNZ governor the kiwi held firm, the currency also benefiting from improving risk markets as equities rallied. The central bank expects inflation to fall to between the 1-3% target around mid-2024 but monetary policy would remain at sustained levels for a decent period. Tonight’s Non-Farm Payroll will be closely watched and could be a poor report if Thursday’s ADP is a signal. With the NZD targeting 0.6000 on the chart anything north of this level represents good buying of USD in a bear cross.

The current interbank midrate is: NZDUSD 0.5966

The interbank range this week has been: NZDUSD 0.5871- 0.6008