NZD

It’s been all go in the New Zealand Dollar (NZD), Australian Dollar (AUD) cross this week with volatility abundant. The Aussie fell Monday posting 0.9215 (1.0850) before bouncing back to 0.9090 (1.1000) Tuesday around the RBA cash rate release. The central bank deciding it not time just yet to cut rates, Governor Lowe more hawkish than markets were expected, the RBA now expects inflation to stay above 3.0% for most of 2024 before dropping to their 2.5% target in 2026. NZ Employment data published above expectations Wednesday at 0.4% for the last quarter with the unemployment rate coming in at 4.6% vs 4.7% in June, higher than May’s 4.3% sending the kiwi back to 0.9115 (1.0970). We think prospects for the medium term In the cross look to be in the 80’s.

The current interbank midrate is: NZDAUD 0.9118 AUDNZD 1.0961

The interbank range this week has been: NZDAUD 0.9085- 0.9222 AUDNZD 1.0843- 1.1006

The New Zealand Dollar (NZD) has outperformed most main board currencies this week including the Australian Dollar (AUD) the kiwi reversing 4 weeks of declines from 0.8970 (1.1150) to clock 0.9130 (1.0950) this morning. The AUD has been under stress from talk of the RBA cutting possibly in November and poor Chinese manufacturing data. Australian CPI came in at 3.8% bang on expectation y/y in June up from May’s 4.0% y/y. Next week’s RBA cash rate announcement should come and go without fanfare and remain at 4.35% before NZ employment data which is predicted to squeeze higher. We think the cross will close the week around 0.9090 (1.10) levels.

The current interbank midrate is: NZDAUD 0.9148 AUDNZD 1.0925

The interbank range this week has been: NZDAUD 0.8970- 0.9171 AUDNZD 1.0903-1.1148

The New Zealand Dollar (NZD) has had a bumper week against the British Pound (GBP) rising from the 0.4565 (2.1900) level Monday to post 0.4680 (2.1380) this morning reversing nearly 2 weeks of poor performances. The Pound has struggled with the latest release of the new government’s public finances. The budget gap is larger than first thought with news this will be filled with higher taxes. The Bank of England (BoE) also cut interest rates last night from 5.25% to 5.0% in a 5/4-member vote weakening the GBP. Next week on the economic docket is NZ employment data with predictions the unemployment rate will rise from 4.3% to 4.7%.

The current interbank midrate is: NZDGBP 0.4663 GBPNZD 2.1445

The interbank range this week has been: NZDGBP 0.4564- 0.4677 GBPNZD 2.1377- 2.1907

The New Zealand Dollar (NZD) looks to post a positive week against the US Dollar (USD), the first in a month as the kiwi came off 0.5860 to trade back at 0.5980 early this morning. US Equity markets have all dipped in overnight trading as markets turned “risk off”- the kiwi falling to 0.5940. Earlier the Fed left their interest rate unchanged at 5.50% as widely predicted with Fed officials acknowledging progress with inflation but not yet comfortable easing policy just yet. Attention now is towards tonight’s US Non-Farm Payroll release and unemployment rate. A drop below 0.5900 may signal further downside to 0.5850 levels.

The current interbank midrate is: NZDUSD 0.5935

The interbank range this week has been: NZDUSD 0.5856- 0.5982

The New Zealand Dollar (NZD) continues to slide lower against the US Dollar (USD) extending mid week’s slump off 0.5945 to clock 0.5885 this morning. Concerns around the global economy this week has increased amid softer data releasing. US Advance GDP came in at 2.8% in Q2 up from 1.4% in Q1 showing consumer spending rose faster than expected led by motor vehicles and recreational goods. The kiwi looks delicately balanced around 0.5880 mid-morning the long-term support area, a break past 0.5860 of Mid-April could see the NZD battle to hold 0.5800.

The current interbank midrate is: NZDUSD 0.5886

The interbank range this week has been: NZDUSD 0.5877- 0.6028

The New Zealand Dollar (NZD) broke the 2-week range trend posting 0.9060 (1.1035) Thursday against the Australian Dollar (AUD) but wasn’t able to hold this area with the AUD reversing losses to push back Friday to 1.1105 (0.9005). We get the feeling the cross should be well into the 89’s with recent weakness but since the AUD has also struggled this week we haven’t seen big swings. Australian Iron Ore prices and weakness in the Chinese economy have been a contributor to recent Aussie weakness. The RBA remains reluctant to move interest rates due to stubborn inflation which could appreciate the AUD in the next while.

The current interbank midrate is: NZDAUD 0.8990 AUDNZD 1.1112

The interbank range this week has been: NZDAUD 0.8980- 0.9062 AUDNZD 1.1034- 1.1135

The British Pound (GBP) climbed to 2.1825 (0.4580) against the New Zealand Dollar (NZD) in morning signalling the pair will close at its highest weekly level since February 2016. UK PMI’s came in solid in contrast to weakening eurozone data leading to the Pound outperforming the kiwi. Next week’s economic docket has the Bank of England (BoE) monetary policy where the BoE will look to cut rates to 5.0% from 5.25%. Most of this will be priced into the NZD/GBP but we should certainly get a reversal higher from the NZD.

The current interbank midrate is: NZDGBP 0.4579 GBPNZD 0.6859

The interbank range this week has been: NZDGBP 0.4574- 0.4666 GBPNZD 2.1428- 2.1861

We have witnessed a massive Euro (EUR) correction over the past 2 weeks with the currency reversing off 0.6230 (1.6050) to trade back at 0.6100 (1.6400) this morning. Risk flow has been a big catalyst, along with poor Chinese data of late contributing a sizeable portion of the Aussie downturn which could continue. German and French Manufacturing prints tonight and should highlight a weakening sector.

Current Level: 1.6412
Resistance: 1.6470
Support: 1.6300
Last Weeks Range: 1.6051- 1.6282

We have witnessed a massive Euro (EUR) correction over the past 2 weeks with the currency reversing off 0.6230 (1.6050) to trade back at 0.6100 (1.6400) this morning. Risk flow has been a big catalyst, along with poor Chinese data of late contributing a sizeable portion of the Aussie downturn which could continue. German and French Manufacturing prints tonight and should highlight a weakening sector.

Current Level: 0.6093
Resistance: 0.6135
Support: 0.6070
Last Weeks Range: 0.6141- 0.6230

The Australian Dollar (AUD) has been sold off hard on the weekly open against the British Pound (GBP) extending last week’s declines to reach a fresh 3 month low of 0.5140 (1.9460) this morning. UK Retail Sales came in poor at -1.2% for the month of June after solid growth in May of 2.9% as households become cautious. The data had minimal effect on the cross as markets have been “risk averse” on the fallout of Biden exiting from the presidential race. UK Manufacturing prints later today, expected to come in decent and give the Pound a further boost.

Current Level: 1.9489
Resistance: 1.9400
Support: 1.9350
Last Weeks Range: 1.9121- 1.9358