NZD

US Equities have slumped causing fresh “risk off flows” of late- the Australian Dollar (AUD) faring better than the New Zealand Dollar (NZD) last week reaching 0.9180 (1.0890) and looking well supported into Tuesday trading. Australian Inflation prints tomorrow for May y/y with investors expecting a rise from 3.6% to 3.8% y/y. Currently however the cross sits at the 50% fib level of the recent long-term low at 0.9065 (1.1030) and high of 0.9330 (1.0720). If the AUD can breakout past this zone the next target would be 0.9130 (1.0950)

Current Level: 1.0869
Resistance: 1.1020
Support: 1.0720
Last Weeks Range: 1.0758 – 1.0890

US Equities have slumped causing fresh “risk off flows” of late- the Australian Dollar (AUD) faring better than the New Zealand Dollar (NZD) last week reaching 0.9180 (1.0890) and looking well supported into Tuesday trading. Australian Inflation prints tomorrow for May y/y with investors expecting a rise from 3.6% to 3.8% y/y. Currently however the cross sits at the 50% fib level of the recent long-term low at 0.9065 (1.1030) and high of 0.9330 (1.0720). If the AUD can breakout past this zone the next target would be 0.9130 (1.0950)

Current Level: 0.9195
Resistance: 0.9330
Support: 0.9075
Last Weeks Range: 0.9182-0.9295

Despite The New Zealand Dollar (NZD) pushing off support at the weekly open from 0.6100 levels against the US Dollar (USD) the cross still remains in a bear trend. Retesting the 50 day Moving Average at 0.6140 last night the pair fell back into Tuesday to 0.6120 as I write. On the calendar this week is key final US GDP predicted to print at 1.4% q/q in line with forecasts. Matariki Day NZ Holiday Friday could see a slow finish to the week.

Current Level: 0.6118
Support: 0.6080
Resistance: 0.6215
Last week’s range: 0.6096- 0.6147

The Bank of England (BoE) left its key interest rate unchanged this morning at 5.25% and signalled they would start joining other central banks cutting interest rates later this year. The vote was 2-7 in favour of a “remain” while 2 members suggested a cut would have been more appropriate. The Pound lost value on the release falling from 0.4830 (2.0700) to 0.4845 (2.0640) but has since recovered to 0.4835 (2.0690) in morning trade. Overall, this week the pair has traded within recent ranges following a 4-week theme. Earlier UK inflation came in bang on expectations at 2.0% offering further excitement the BoE should start unwinding monetary policy in August or November. A push past resistance at 0.4855 (1.0600), the top of the 16-week move should see further upswing bias for the kiwi.

The current interbank midrate is: NZDGBP 0.4832 GBPNZD 2.0695

The interbank range this week has been: NZDGBP 0.4808- 0.4847 GBPNZD 2.0631- 2.0798

The New Zealand Dollar (NZD) has managed to avoid dropping below long-term support at 0.6080 this week against the US Dollar (USD) retesting this area earlier in the week trading into Friday around 0.6120. NZ GDP came in hot Thursday at a surprising 0.2% against expectations of 0.1%- staggering, given we expected a negative result. However, this data is first quarter ending March and incoming data since has not been rosy. If second quarter GDP comes in above 0.0% the only conclusion would be someone is “doctoring the logbooks”. US Building Permits were a miss this morning with data suggesting new residential construction has dived 5.5% in May. US GDP prints next week.

The current interbank midrate is: NZDUSD 0.6117

The interbank range this week has been: NZDUSD 0.6096- 0.6147

The New Zealand Dollar (NZD) has struggled over the week against a storming Australian Dollar (AUD), the cross reaching 0.9180 (1.0890) in one way traffic. The RBA decision saw the cash rate stay unchanged at 4.35% while the central bank hasn’t ruled out further rate hikes if price pressures remain elevated and stubborn. NZ GDP for the first quarter of 2024 ending March came in at 0.2% surprising markets after 0.1% was expected. We always thought even 0.1% was to high given recent economic events, but while data has worsened over May and June we expect the second quarter data to send NZ back into a recession. Aussie CPI next week holds our interest on the calendar with predictions this will print just below the current 3.6%.

The current interbank midrate is: NZDAUD 0.9187 AUDNZD 1.087

The interbank range this week has been: NZDAUD 0.9181- 0.9294 AUDNZD 1.0759- 1.0891

The Australian Dollar (AUD) has reversed some of the gains made last week falling back against the Euro (EUR) to 0.6150 (1.6260)  from 0.6195 (1.6150) in the aftermath of the European election results. We aren’t expecting any surprises in today’s RBA cash rate announcement with the central bank expected to keep the rate at 4.35%. Governor Bullock’s statement should give us further clues as to whether the RBA keep their policy rhetoric around inflation risks or change the ballgame.

Current Level: 1.6228
Resistance: 1.6400
Support: 1.6150
Last Weeks Range: 1.6148- 1.6384

The Australian Dollar (AUD) has reversed some of the gains made last week falling back against the Euro (EUR) to 0.6150 (1.6260)  from 0.6195 (1.6150) in the aftermath of the European election results. We aren’t expecting any surprises in today’s RBA cash rate announcement with the central bank expected to keep the rate at 4.35%. Governor Bullock’s statement should give us further clues as to whether the RBA keep their policy rhetoric around inflation risks or change the ballgame.

Current Level: 0.6162
Resistance: 0.6190
Support: 0.6100
Last Weeks Range: 0.6103- 0.6192

Range trading in the British Pound (GBP), Australian Dollar pair continue with prices around 0.5210 (1.9200) into Tuesday. We expect a little more volatility over the week with both the Bank of England (BoE) and the Reserve Bank of Australia (RBA) announcing rate statements. Both are expected to keep rates unchanged, but the RBA could be hawkish. This would be good for the AUD if rate policy rhetoric remains “higher for longer”. As for the BoE – members are expected to vote 7-2 in favour of a “hold”. UK inflation prints tomorrow and is predicted to dip from 2.3% y/y to 2.0% supporting cuts to come. We expect price to retrace to retest 0.5240 (1.9090) over the week.

Current Level: 1.9208
Resistance: 1.9400
Support: 1.9090
Last Weeks Range: 1.9145- 1.9342

The Euro (EUR) fought back Monday to 1.7540 (0.5700) from 1.7390 (0.5750) against the New Zealand Dollar (NZD) in the wake of a 7-week slide. The Euro getting assistance from Marine Le Pen assurances saying she will co-operate with Macron if she wins the French election. On the calendar NZ GDP prints Thursday and is expected to come in at 0.1% in the first quarter of 2024. We would be very surprised if we see a positive result. We expect further downside in the kiwi this week.

Current Level: 1.7503
Resistance: 1.7700
Support: 1.7400
Last Weeks Range: 1.7388 – 1.7668