NZD

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: 0.5713
Support: 0.5650
Resistance: 0.5750
Last week’s range: 0.5659- 0.5751

The New Zealand Dollar (NZD) bounced off resistance at 0.4840 (2.0650) late Friday against the British Pound (GBP) to trade back at 0.4830 (2.0700) into Tuesday trading. The GBP looks to retest last week’s low at 0.4795 (2.0860), however UK CPI will dictate moves. Inflation is predicted to drop in May from 2.3% y/y to 2.0% making it the lowest rate since July 2021. Inflation has fallen massively since the Oct 2022 high of 11.1%. The Bank of England’s target of 2.0% might eventuate bringing about cuts later in the year.

Current Level: 2.0721
Resistance: 2.0920
Support: 2.0600
Last Weeks Range: 2.0632- 2.0858

The New Zealand Dollar (NZD) bounced off resistance at 0.4840 (2.0650) late Friday against the British Pound (GBP) to trade back at 0.4830 (2.0700) into Tuesday trading. The GBP looks to retest last week’s low at 0.4795 (2.0860), however UK CPI will dictate moves. Inflation is predicted to drop in May from 2.3% y/y to 2.0% making it the lowest rate since July 2021. Inflation has fallen massively since the Oct 2022 high of 11.1%. The Bank of England’s target of 2.0% might eventuate bringing about cuts later in the year.

Current Level: 0.4826
Resistance: 0.4855
Support: 0.4780
Last Weeks Range: 0.4794- 0.4846

Price action in the New Zealand Dollar (NZD), Australian Dollar (AUD) was flat last week pivoting around 1.0760 (0.9295) area. Monday the Aussie is looking to regain the edge pushing up to 1.0790 (0.9270) heading into Tuesday. Today’s RBA cash rate announcement should see the rate remain unchanged at 4.35% the fifth straight meeting with investors keen to hear from Governor Bullock as to her forecast for rate policy over the medium to long term. Surely she will come off the hawkish tone of late and start to consider bringing forward rate cuts from mid-2025. The risks of the economy falling into a recession is greater if they decide to hold rates too long. We see risks to the downside for the kiwi this week.

Current Level: 1.0779
Resistance: 1.0870
Support: 1.0720
Last Weeks Range: 1.0731 – 1.0796

Price action in the New Zealand Dollar (NZD), Australian Dollar (AUD) was flat last week pivoting around 1.0760 (0.9295) area. Monday the Aussie is looking to regain the edge pushing up to 1.0790 (0.9270) heading into Tuesday. Today’s RBA cash rate announcement should see the rate remain unchanged at 4.35% the fifth straight meeting with investors keen to hear from Governor Bullock as to her forecast for rate policy over the medium to long term. Surely she will come off the hawkish tone of late and start to consider bringing forward rate cuts from mid-2025. The risks of the economy falling into a recession is greater if they decide to hold rates too long. We see risks to the downside for the kiwi this week.

Current Level: 0.9269
Resistance: 0.9330
Support: 0.9200
Last Weeks Range: 0.9262-0.9318

Prices Monday in the US Dollar (USD), New Zealand Dollar (NZD) cross extended lower off the 0.6140 area to reach solid support at the 0.6100 level before reversing towards 0.6130 in early Tuesday trading. NZIER (New Zealand Institute of Economic Research) issued its quarterly forecast yesterday highlighting a downgraded view of economic outlook to come over the coming months. Growth ending Mar 2025 has been revised lower to 0.6%. GDP for the first quarter 2024 prints Thursday and is coincidentally expected to come in at 0.1%- we can’t see it. Later in the week is US Manufacturing data. Topside moves for the kiwi could be limited.

Current Level: 0.6135
Support: 0.6100
Resistance: 0.6220
Last week’s range: 0.6098- 0.6220

The New Zealand Dollar (NZD) came roaring back this week against the British Pound (GBP) from 0.4795 (2.0860) to reach 0.4850 (2.0630) regaining last week’s momentum as risk flow improved. UK labour market data came in mixed with unemployment rising to 4.4% from 4.3% the highest number since Oct 2021 while the number of paid payroll numbers declined 3,000 after 36,000 fell in April. We have a busy week of economic data next week with UK CPI y/y, Bank of England Cash Rate and NZ GDP to digest. Resistance on the chart in the pair is 0.4855 (2.0600) the 28 Feb high- a break past here would suggest further upside for the kiwi.

The current interbank midrate is: NZDGBP 0.4821 GBPNZD 2.0742

The interbank range this week has been: NZDGBP 0.4794- 0.4846 GBPNZD 2.0632- 2.0858

Risk on flow this week overall has supported the New Zealand Dollar (NZD) rising across the board, to 0.6220 against the US Dollar (USD). US CPI came in soft at 3.3% compared to 3.4% predicted before the Federal Reserve meeting. The Fed kept held their benchmark interest rate at 5.50% as widely expected with the central bank now only pencilling in 1 cut this year. 15 of 19 Fed officials expect the Fed to cut just once this year compared to 6 cuts forecast in early May. Friday action has seen prices fall back to around 0.6165 stalling out on hawkish fed speak over the past day. Next week’s NZ GDP for the first quarter of 2024 should reflect a negative number as the NZ economy struggles in a recession.

The current interbank midrate is: NZDUSD 0.6147

The interbank range this week has been: NZDUSD 0.6098- 0.6221

The New Zealand Dollar (NZD), Australian Dollar (AUD) still sits in the bull trend channel this week at 0.9295 (1.0760) currently, from the low at 0.9065 (1.1030) set early May. The NZD still well supported on dips in the run up to 0.9320 however with Aussie job numbers printing better than expected we have seen more buying of the AUD over the past day or so. Any chance we had of the RBA cutting rates this year is now a pipe dream with the unemployment dipping slightly from 4.1% to 4.0% in May the Australian economy showing reliance. Next week’s RBA cash rate will remain at 4.35%- a non-event. Technically we pick the cross to retest the fib area at 0.9260 (1.0800) early next week.

The current interbank midrate is: NZDAUD 0.9280 AUDNZD 1.0771

The interbank range this week has been: NZDAUD 0.9266- 0.9318 AUDNZD 1.0731- 1.0796

The Australian Dollar (AUD) was sold down to 0.6100 (1.6400) Friday a 5-week low post US (NFP) Non-Farm Payroll releasing before recovering in Monday markets to 0.6150 (1.6260) against the Euro. Weekend European election results sank the Euro, the French President Macron calling a snap election after being defeated by the far right. On the economic docket this week in the pair is Aussie jobs numbers Thursday expected to weaken the AUD.

Current Level: 1.6315
Resistance: 1.6600
Support: 1.6210
Last Weeks Range: 1.6252- 1.6419