JPY

The New Zealand Dollar (NZD) has retraced 50% of last week’s gains from the high at 0.6000 falling lower against the US Dollar (USD) to 0.5904 as I write. Risk sentiment has not been as buoyant this week with equity markets and metal commodities not to mention the Gaza conflict all making markets risk averse. NZ Inflation expectations were revised lower to 2.76% from 2.83% over the next two years with the Cash Rate to stay at 5.50% until Dec 2023 and dip to 4.99% by September 2024. The report also highlighted GDP to be around 1.26% over the next year increasing to 2.15% in two years. Jereme Powell speech at an IMF event this morning was interrupted by climate protesters- he was overheard saying “close the fu#king door”, speaking on inflation he said he would not hesitate to tighten policy further if needed. It would be a brave person to forecast the kiwi back at 0.6000 any time soon.

The current interbank midrate is: NZDUSD 0.5894

The interbank range this week has been: NZDUSD 0.5890- 0.6000

The New Zealand Dollar (NZD), Australian Dollar (AUD) cross has bounced off the key 50% Fibonacci levels at 0.9270 (1.0785) over the past hour, this being the high at 0.9400 (1.0630) and the recent low at 0.9140 (1.0940) suggesting the NZD may be a tad overbought. It wouldn’t surprise us to see prices drift lower to around 0.9215 (1.0850) at the weekly close. The Aussie has struggled all week post the RBA cash rate announcement, the central bank hiking interest rates to 4.35% from 4.10% as predicted but the surprise came when we saw the AUD sell off. Perhaps this was caused by weaker metal prices and a softer Chinese CPI data read?… but strange, nonetheless. Governor Bullock suggested she wouldn’t hesitate to hike again if stubborn inflation remained.

The current interbank midrate is: NZDAUD 0.9256 AUDNZD 1.0797

The interbank range this week has been: NZDAUD 0.9178- 0.9274 AUDNZD 1.0782- 1.0895

The Euro (EUR) was slayed last week falling to 1.6450 (0.6080) levels against the Australian Dollar (AUD) as risk on flow demand stimulates the AUD. The cross wasn’t able to kick on past long-term support at 0.6080 (1.6450), bouncing back towards 0.6050 (1.6530) this morning. ECB’s Holzmann said the ECB must be prepared to raise interest rates again if needed, confirming that rates would not be cut any time soon. The ECB left rates unchanged in late October after 10 consecutive hikes. Today’s RBA meeting will confirm a hike in their interest rate from 4.10% to 4.35%. We expect a retest of 0.6080 (1.6450).

Current Level: 1.6520
Resistance: 1.6600
Support: 1.6460
Last Weeks Range: 1.6454 – 1.6759

The Euro (EUR) was slayed last week falling to 1.6450 (0.6080) levels against the Australian Dollar (AUD) as risk on flow demand stimulates the AUD. The cross wasn’t able to kick on past long-term support at 0.6080 (1.6450), bouncing back towards 0.6050 (1.6530) this morning. ECB’s Holzmann said the ECB must be prepared to raise interest rates again if needed, confirming that rates would not be cut any time soon. The ECB left rates unchanged in late October after 10 consecutive hikes. Today’s RBA meeting will confirm a hike in their interest rate from 4.10% to 4.35%. We expect a retest of 0.6080 (1.6450).

Current Level: 0.6053
Resistance: 0.6075
Support: 0.6025
Last Weeks Range: 0.5966 – 0.6067

The Bank of England’s (BoE) hawkish tone saw the Pound (GBP) extend Friday’s direction Monday to 0.5235 (1.9100) against the Australian Dollar (AUD) before dropping back to 0.5255 (1.9030) It can be said the Bank of England hadn’t considered cutting rates last week with persistence inflation a worry. The vote a 6-3 hold split with the central bank upgrading their inflation forecast. This week’s focus is on today’s RBA cash rate announcement with predictions the RBA will hike to 4.35% from 4.10% ending 4 meetings of holds. This will be the new governor Michele Bullock’s first hike since taking over recently. In theory we should see Aussie strength today, currently 0.5255 (1.9030) pushing higher in the last few hours.

Current Level: 1.9025
Resistance: 1.9190
Support: 1.8940
Last Weeks Range: 1.8896 – 1.9203

The New Zealand Dollar (NZD) reversed off the triple bottom at 0.5480 (1.8250) last week to climb back to 0.5585 (1.7900) levels at the weekly close against the Euro (EUR). An outflow of US Dollar flows supporting the kiwi in the aftermath of last week’s US NFP data. The Fibonacci 50% retracement 0.5600 (1.7875) from the recent high at 0.5715 (1.7500) and the low at 0.5480 (1.8250) looks to be favouring a technical move lower.

Current Level: 1.7988
Resistance: 1.8250
Support: 1.7875
Last Weeks Range: 1.7877 – 1.8250

The New Zealand Dollar (NZD) reversed off the triple bottom at 0.5480 (1.8250) last week to climb back to 0.5585 (1.7900) levels at the weekly close against the Euro (EUR). An outflow of US Dollar flows supporting the kiwi in the aftermath of last week’s US NFP data. The Fibonacci 50% retracement 0.5600 (1.7875) from the recent high at 0.5715 (1.7500) and the low at 0.5480 (1.8250) looks to be favouring a technical move lower.

Current Level: 0.5559
Support: 0.5480
Resistance: 0.5600
Last week’s range: 0.5479 – 0.5593

Price in the New Zealand Dollar (NZD), British Pound (GBP) moved off the 0.4845 (2.0640) open to reach 0.4810 (2.0780) in early Tuesday trading. The risk on drivers is still evident in the aftermath of Friday’s US Non-Farm release. Also of note was UK services PMI which beat predictions and a hawkish Bank of England. This week’s NZ inflation expectations tomorrow which gives us a review of predictions for the next 2 years could be interesting. UK GDP m/m prints Friday. The kiwi will be eying 0.4850 (2.0615) this week.

Current Level: 2.0716
Resistance: 2.0940
Support: 2.0600
Last Weeks Range: 2.0563- 2.0972

Price in the New Zealand Dollar (NZD), British Pound (GBP) moved off the 0.4845 (2.0640) open to reach 0.4810 (2.0780) in early Tuesday trading. The risk on drivers is still evident in the aftermath of Friday’s US Non-Farm release. Also of note was UK services PMI which beat predictions and a hawkish Bank of England. This week’s NZ inflation expectations tomorrow which gives us a review of predictions for the next 2 years could be interesting. UK GDP m/m prints Friday. The kiwi will be eying 0.4850 (2.0615) this week.

Current Level: 0.4827
Resistance: 0.4855
Support: 0.4775
Last Weeks Range: 0.4768 – 0.4863

RBA and Melbourne Cup Day. The RBA is expected to hike interest rates from 4.10% to 4.35% later today after a 4-meeting pause. The New Zealand Dollar (NZD), Australian Dollar (AUD) cross has been bouncing around recent levels circa 0.9215 (1.0850) this week after falling to 0.9140 (1.0940) last week as risk flow benefited the AUD. The RBA efforts are to achieve a 2-3% inflation target by the end of 2025 and today they may signal further hiking if they see it necessary. In other key data is NZ quarterly inflation expectations Wednesday, anything above 2.83% could send the kiwi higher. No 1 is our pick in the Cup at 5.05 NZT

Current Level: 1.0882
Resistance: 1.0940
Support: 1.0820
Last Weeks Range: 1.0842 – 1.0941