European economies are suffering recessionary economic conditions and a resurgence in inflation, dimming the likelihood of interest rate cuts in 2024 and adding to tight monetary conditions. The tight money conditions have supported the EUR, although weaker trade and growth do not auger well for 2024.
Current Level: 0.5590
Support: 0.5580
Resistance: 0.5650
Last week’s range: 0.5590 – 0.5670
The GBP has been supported by a hawkish Bank of England monetary policy for much of 2023, but had signalled a more neutral 2024. The rebound in inflation in the UK in early 2024, will only serve to reinforce the Central Banks tight policy and add support for the Pound. The cross rate is likely to have a downward bias on the short term.
Current Level: 2.0920
Resistance: 2.0618
Support: 2.1052
Last Weeks Range: 2.0618- 2.0920
The GBP has been supported by a hawkish Bank of England monetary policy for much of 2023, but had signalled a more neutral 2024. The rebound in inflation in the UK in early 2024, will only serve to reinforce the Central Banks tight policy and add support for the Pound. The cross rate is likely to have a downward bias on the short term.
Current Level: 0.4780
Resistance: 0.4850
Support: 0.4750
Last Weeks Range: 0.4780 – 0.4850
The NZD has been under pressure but has managed to post gains on the AUD, as the commodity dependent currency has suffered even more severely, from international demand and supply issues. Falling demand from a recessionary Europe has impacted Australian commodity demand directly, and indirectly, through flow on from flagging industrial production in China. The cross rate NZD/AUD, has rallied to back above 0.9300, but this is likely to range trade between 0.9200 and 0.9400.
Current Level: 1.0710
Resistance: 1.0800
Support: 1.0630
Last Weeks Range: 1.0650 – 1.0790
The NZD has been under pressure but has managed to post gains on the AUD, as the commodity dependent currency has suffered even more severely, from international demand and supply issues. Falling demand from a recessionary Europe has impacted Australian commodity demand directly, and indirectly, through flow on from flagging industrial production in China. The cross rate NZD/AUD, has rallied to back above 0.9300, but this is likely to range trade between 0.9200 and 0.9400.
Current Level: 0.9250
Resistance: 0.9350
Support: 0.9230
Last Weeks Range: 0.9230 – 0.9350
NZ Business Confidence gapped, from minus 52 at the end of Q4 2023, to only minus 2. This was a massive rebound and is a confirmation that business is positive regarding the new Government policies, so far. Resurgent inflation in Europe and the US has pushed bond yields higher and enabled the US Dollar to rebound, pushing the NZD back to below 0.6100. Further inflationary pressures and the supply problems continuing to escalate in the Middle East, will ensure further downside pressures.
Current level: 0.6080
Support: 0.6060
Resistance: 0.6130
Last week’s range: 0.6080-0.6230
The November/December bull trend in the Euro (EUR), Australian Dollar (AUD) ended in late December bouncing hard off 0.6200 (1.6140), with the Euro making gains back to 0.6080 (1.6450). The Euro received a boost from ECB’s Lane who said interest rates were not something of consideration in the short term. Germany, the European powerhouse, is likely to take some time to return to decent growth after succumbing to general economic weakness in 2023. The economy contracted 0.3% in the fourth quarter with weak industrial production and Retails Sales reports. Aussie jobs data releases Thursday on the docket, we expect the unemployment rate to remain at 3.9%.
Current Level: 1.6452
Resistance: 1.6800
Support: 1.6140
Last Weeks Range: 1.6260 – 1.6459
The November/December bull trend in the Euro (EUR), Australian Dollar (AUD) ended in late December bouncing hard off 0.6200 (1.6140), with the Euro making gains back to 0.6080 (1.6450). The Euro received a boost from ECB’s Lane who said interest rates were not something of consideration in the short term. Germany, the European powerhouse, is likely to take some time to return to decent growth after succumbing to general economic weakness in 2023. The economy contracted 0.3% in the fourth quarter with weak industrial production and Retails Sales reports. Aussie jobs data releases Thursday on the docket, we expect the unemployment rate to remain at 3.9%.
Current Level: 0.6078
Resistance: 0.6200
Support: 0.5950
Last Weeks Range: 0.6075 – 0.6150
The Australian Dollar (AUD) has kicked off 2024 underperforming against the British Pound (GBP). After making it through to 0.5380 (1.8590) late December it’s been all Pound action. UK GDP wasn’t exactly favourable dropping the GBP for a while last week together with a poor Industrial Production read. The Pound recovered back to early December levels around 0.5235 (1.9100) and now looks to target the October level at 0.5175 (1.9330). On the calendar we have Inflation data printing tomorrow expected to click lower off 3.9%.
Current Level: 1.9113
Resistance: 1.9300
Support: 1.8900
Last Weeks Range: 1.8901 – 1.9117
It’s been a quiet few weeks of economic releases in the Euro (EUR), New Zealand Dollar (NZD) pair with the first significant piece of economic data to be released since mid-December being next week’s NZ CPI and ECB cash rates reports. The kiwi made gains through November to year end coming from 0.5470 (1.8280) to reach 0.5755 (1.7380) just prior to Christmas before giving back the advantage. We have certainly seen a pullback of risk in 2024 the Euro reaching 1.7700 (0.5650) overnight.
Current Level: 1.7677
Resistance: 1.7700
Support: 1.7420
Last Weeks Range: 1.7487 – 1.7645