NZD

The Euro (EUR) has been unable to hold gains around 0.5550 (1.8015) Monday against the New Zealand Dollar (NZD) retracing to 0.5570 (1.7950) into Tuesday morning trade with risk supporting the kiwi. The European Central Bank (ECB) cut their interest rate from 4.25% to 3.65% as scheduled. Lagarde saying forecast monetary policy is tracking well- incoming data is not suggesting any radical changes to economic forecasting. All eyes will be on NZ GDP q/q with predictions of a poor second quarter at -0.4% following first quarter’s 0.2%. A retest of 0.5585 (1.7900) looks unlikely.

Current Level: 1.7966
Resistance: 1.8020
Support: 1.7830
Last Weeks Range: 1.7896 – 1.8028

The Euro (EUR) has been unable to hold gains around 0.5550 (1.8015) Monday against the New Zealand Dollar (NZD) retracing to 0.5570 (1.7950) into Tuesday morning trade with risk supporting the kiwi. The European Central Bank (ECB) cut their interest rate from 4.25% to 3.65% as scheduled. Lagarde saying forecast monetary policy is tracking well- incoming data is not suggesting any radical changes to economic forecasting. All eyes will be on NZ GDP q/q with predictions of a poor second quarter at -0.4% following first quarter’s 0.2%. A retest of 0.5585 (1.7900) looks unlikely.

Current Level: 0.5566
Support: 0.5550
Resistance: 0.5610
Last week’s range: 0.5546- 0.5587

The New Zealand Dollar (NZD) reached 0.4720 (2.1200) Thursday against the British Pound (GBP) before giving back gains towards the end of the week and into Monday to 0.4680 (2.1360). Chances of a Bank of England (BoE) cut of 25 points have increased over the past few days which could soften moves higher by the GBP. UK Inflation releases first which is forecast to remain at 2.20% y/y. If this comes in light the mood by the B0E could turn reasonably dovish. Good for the kiwi.

Current Level: 2.1321
Resistance: 2.1470
Support: 2.1000
Last Weeks Range: 2.1195- 2.1345

The New Zealand Dollar (NZD) reached 0.4720 (2.1200) Thursday against the British Pound (GBP) before giving back gains towards the end of the week and into Monday to 0.4680 (2.1360). Chances of a Bank of England (BoE) cut of 25 points have increased over the past few days which could soften moves higher by the GBP. UK Inflation releases first which is forecast to remain at 2.20% y/y. If this comes in light the mood by the B0E could turn reasonably dovish. Good for the kiwi.

Current Level: 0.4690
Resistance: 0.4760
Support: 0.4660
Last Weeks Range: 0.4684- 0.4718

NZ GDP q/q and Australian employment data is our focus on the docket this week in the New Zealand Dollar (NZD), Australian Dollar (AUD) cross. The NZD continues to weaken off towards 0.9175 (1.0900) numbers into Tuesday possibly due to speculation that the Reserve Bank of New Zealand could cut rates 50 points In October instead of earlier expectations of 0.25%. Also, of note is a decline in NZ home sales adding to the NZD sell off. With NZ GDP publishing Thursday around -0.4% for the second quarter this should put further pressure on the NZD. Australian jobs data prints Thursday and should be benign, however if the unemployment rates print worse than 4.2% amid cooling inflation this could bring forward rate cut projections and dampen AUD hawks.

Current Level: 1.0892
Resistance: 1.1020
Support: 1.0780
Last Weeks Range: 1.0766 – 1.0894

NZ GDP q/q and Australian employment data is our focus on the docket this week in the New Zealand Dollar (NZD), Australian Dollar (AUD) cross. The NZD continues to weaken off towards 0.9175 (1.0900) numbers into Tuesday possibly due to speculation that the Reserve Bank of New Zealand could cut rates 50 points In October instead of earlier expectations of 0.25%. Also, of note is a decline in NZ home sales adding to the NZD sell off. With NZ GDP publishing Thursday around -0.4% for the second quarter this should put further pressure on the NZD. Australian jobs data prints Thursday and should be benign, however if the unemployment rates print worse than 4.2% amid cooling inflation this could bring forward rate cut projections and dampen AUD hawks.

Current Level: 0.9170
Resistance: 0.9275
Support: 0.9075
Last Weeks Range: 0.9179 – 0.9288

The New Zealand Dollar (NZD) ticked lower to end the week around 0.6150 against the US Dollar (USD) perhaps the decline in NZ home sales may have dragged down the kiwi. Into Tuesday morning things are looking better for risk currencies with the NZD making back earlier losses to the 0.6200 level. Odds of a bigger cut to the OCR have increased to around 50% of a 50-point drop in October, we expect to see the NZD capped around the 0.6230 this week. We have a lot of economic releases over the week including The Fed interest rate release predicted to dip from 5.50% to 5.25%.

Current Level: 0.6195
Support: 0.6120
Resistance: 0.6240
Last week’s range: 0.6105- 0.6192

The Australian Dollar (AUD) dropped to 0.6020 (1.6620) Friday against the Euro (EUR) after succumbing to a risk off market tone in the wake of global recession risks. It has bounced back Monday to 0.6040 (1.6560) and should improve if commodity markets correct higher over the week. The European Central Bank (ECB) announce their cash rate Friday night and are widely predicted to drop their interest rate from 4.25% to 3.65% or 50 points following their 25-point cut in June. Eurozone inflation is certainly improving, cooling from 2.6% in July to 2.2% in August. We fancy a retest of support at the 0.6100 (1.6400) level.

Current Level: 1.6586
Resistance: 1.6700
Support: 1.6450
Last Weeks Range: 1.6281- 1.6626

The Australian Dollar (AUD) dropped to 0.6020 (1.6620) Friday against the Euro (EUR) after succumbing to a risk off market tone in the wake of global recession risks. It has bounced back Monday to 0.6040 (1.6560) and should improve if commodity markets correct higher over the week. The European Central Bank (ECB) announce their cash rate Friday night and are widely predicted to drop their interest rate from 4.25% to 3.65% or 50 points following their 25-point cut in June. Eurozone inflation is certainly improving, cooling from 2.6% in July to 2.2% in August. We fancy a retest of support at the 0.6100 (1.6400) level.

Current Level: 0.6029
Resistance: 0.6080
Support: 0.5990
Last Weeks Range: 0.6014- 0.6142

Momentum in the British Pound (GBP) continues through last week off 0.5170 (1.9350) areas against the Australian Dollar (AUD) to reach 0.5075 (1.9700) in overnight trading. Risk flows have favoured safe haven currencies since last week’s US Non-Farm Payroll release raising questions around global growth concerns. Moving averages are signalling further pain for the AUD after clearing the 0.5130 (1.95) zone, we expect downside moves to dominate price action this week.

Current Level: 1.9642
Resistance: 1.9800
Support: 1.9520
Last Weeks Range: 1.9340- 1.9686