NZD

The New Zealand Dollar (NZD) is still underperforming against the Australian Dollar (AUD) sitting just off the yearly bottom of 0.9070 (1.1026) at 0.9078 (1.1015) the 11-month low as I write. The kiwi had a good run higher late last week but was unable to hold levels around 0.9115 (1.0970). A hawkish slant at today’s RBA meeting could be the catalyst for the Aussie strength of late with prospects of a hike not outside the realms of probability. Even if the RBA maintain their 4.35% the rhetoric could be centered around high inflation. The next rate cut is forecast for November at the earlier, there is a chance this could get pushed out. If this happens we would almost certainly see further strength in the AUD and a look at 0.9000 (1.1110)

Current Level: 0.9067
Resistance: 0.9175
Support: 0.9050
Last Weeks Range: 0.9069- 0.9125

The New Zealand Dollar (NZD), US Dollar (USD) opened the week around 0.6010 and has hovered around this level in thin market conditions. Although the cross has pushed up from the 0.5880 area its still trading in a bear channel and could ease back again over the week. We would need a break above 0.6100 numbers to confirm a proper shift north. Non-Farm Payroll numbers were a miss Friday with only 175,000 jobs added to the workforce with the unemployment ticking up to 3.9% from 3.8% in March. The Fed may indeed end up cutting rates over the following months with this data reiterating an economy which is easing faster than predicted. The economic docket is light this week which could indicate low volatility.

Current Level: 0.6005
Support: 0.5877
Resistance: 0.6050
Last week’s range: 0.5873- 0.6046

The New Zealand Dollar NZD) extended its mid-week comeback against the British Pound (GBP) coming off 0.4705 (2.1250) to post 0.4760 (2.1000). We suggested we may see a come back of sorts late in the week but not to this extent. Earlier NZ employment data showed a further softening to the job’s market in the first quarter of 2024 with the unemployment rate rising to 4.3% from 4.0%, in line with the RBNZ’s forecast and won’t offer anything new for the RBNZ guidance. On the calendar- Next week’s Bank of England (BoE) official rate announcement is predicted to stay unchanged at 5.25%.

The current interbank midrate is: NZDGBP 0.4754 GBPNZD 2.1034

The interbank range this week has been: NZDGBP 0.4704- 0.4773 GBPNZD 2.0951- 2.1258

The Federal Reserve kept their interest rate at the highest level in over 2 decades yesterday blaming inflation setbacks for the “higher for longer” mantra. A wait and see approach which could last many months to come if we don’t see a marked weakening of the US economy. The New Zealand Dollar (NZD) reversed off 0.5870 reaching the 0.5960 level in early Friday trading and now targets the early week high at 0.5985. Assisting the kiwi was US equity markets rising over 1.0% in the NY session post the Powell speech. The Fed also saying they were committed to reducing their 7.4 trillion asset portfolio as rate hikes were off the table. Tomorrow mornings US Non-farm Payroll and unemployment rate will move prices.

The current interbank midrate is: NZDUSD 0.5963

The interbank range this week has been: NZDUSD 0.5872- 0.5983

The New Zealand Dollar (NZD) retreated again against the Australian Dollar (AUD) to clock 0.9070 (1.1025), dropping 9 out of the last 10 weeks. A weekly close below 0.9075 (1.1020) would register the lowest level since October 2022 for the cross. RBA’s Kearns was on the wires with hawkish comments saying the RBA has been far to timid in raising rates, Aussie dwellings approvals were a miss coming in at 1.9% vs 3.5% in March the release not able to dampen the spirits of AUD buyers. Next week’s RBA cash rate release will be interesting with a 50/50 prediction of whether the RBA will hike or hold interest rates. Buyers of AUD may want to consider current levels before the possibility the cross dropping into the 80’s.

The current interbank midrate is: NZDAUD 0.9069 AUDNZD 1.1016

The interbank range this week has been: NZDAUD 0.9069- 0.9124 AUDNZD 1.0960- 1.1026

The Euro (EUR) climbed to 1.6495 (0.6062) overnight against the Australian Dollar (AUD) as risk mood deteriorated with the Fed meeting looming. The cross has bounced off fib 61.8% support and sits around the 50% fib zone of the high at 0.6135 (1.6300) and the low of 0.6020 (1.6615) suggesting subsequent moves could be towards 0.6085 (1.6430) today. With no further tier one data on the docket in the cross this week moves should be “risk” corresponding.

Current Level: 1.6469
Resistance: 1.6600
Support: 1.6150
Last Weeks Range: 1.6347- 1.6610

The Euro (EUR) climbed to 1.6495 (0.6062) overnight against the Australian Dollar (AUD) as risk mood deteriorated with the Fed meeting looming. The cross has bounced off fib 61.8% support and sits around the 50% fib zone of the high at 0.6135 (1.6300) and the low of 0.6020 (1.6615) suggesting subsequent moves could be towards 0.6085 (1.6430) today. With no further tier one data on the docket in the cross this week moves should be “risk” corresponding.

Current Level: 0.6072
Resistance: 0.6190
Support: 0.6025
Last Weeks Range: 0.6020- 0.6117

A risk off Tuesday has seen the Australian Dollar (AUD) drop to 0.5185 (1.9290) against the British Pound (GBP) early this morning after starting the week out at 0.5235 (1.9100). Australian Retail Sales for the March quarter came in weaker than expected at -0.4% compared to 0.2% bringing early sellers of AUD to the table. US Stocks drifted lower, down over 1.5% in overnight trading as punters started to react to tomorrow’s FOMC rate decision. On the chart the GBP could run into resistance to the downside at the Fib level at 0.5170 (1.9350)

Current Level: 1.9297
Resistance: 1.9530
Support: 1.9100
Last Weeks Range: 1.9085- 1.9280

The New Zealand Dollar (NZD) has closed out the day in negative territory against the Euro (EUR) dropping through daily support at 0.5525 (1.8095) to reach 0.5520 (1.8115) a fresh yearly low. Risk sentiment hasn’t favoured the kiwi with investors selling risk products in line with equity drops overnight. Data out in the US has been less than impressive causing spooked markets leading into tomorrow’s Fed meeting. ECB’s Knot was also out cautioning against cutting rates to soon saying it was too early to comment past June.

Current Level: 1.8135
Resistance: 1.8200
Support: 1.7870
Last Weeks Range: 1.7956 – 1.8096

The New Zealand Dollar (NZD) bounced back off Monday’s open at 0.5530 (1.8090) to reach 0.5560 (1.7980) into Tuesday trading. 0.5560 (1.7980) is the 50% fib retracement points of recent high and lows and suggests the kiwi may have been overbought to current levels. We favour a retest of the 0.5540 (1.8050) this week data dependant. Eurozone Services and Manufacturing print tonight expected to reflect modest rises in March.

Current Level: 0.5514
Support: 0.5495
Resistance: 0.5595
Last week’s range: 0.5526- 0.5569