NZD

FX News

NZD/USD Transfer

The New Zealand Dollar (NZD) slumped to a 5-week low to 0.6060 against the US Dollar (USD) this week. Friday the kiwi has started a recovery of sorts trading back to 0.6077 as I write but with global headwinds it may struggle to gain much momentum to the north. The NZ job market eased in the second quarter with job participation hitting an all-time high of 72.4% with more than 3M people now employed in the workforce. The unemployment rate rose slightly from 3.4% in the first quarter to 3.6 in the second, the question remains- will this be enough to force the hand of the RBNZ to hold interest rates at their next meeting on August 16th- we suspect not. Tonight’s Non-Farm Payroll (NFP) number is predicted to come in light reflecting an easing to the job’s market. Long term support in the cross is around the 0.6040 to 0.6000 range, recent sentiment suggests this area won’t hold.

The current interbank midrate is: NZDUSD 0.6080

The interbank range this week has been: NZDUSD 0.6061- 0.6226

FX News

NZD/GBP Transfer

The New Zealand Dollar (NZD) extended midweek losses against the British Pound (GBP) reaching fresh lows around 0.4775 (2.0950) marking a 28-month level in the cross. The Bank of England (BoE) hiked their interest rate 25 points overnight as widely predicted voting 6-3 in favour. The central bank saying they will need to hike again later this year with inflation projections this year still exceedingly high. Earlier in the week NZ job’s data released with the participation rate hitting an all-time high and the unemployment rate clicking higher to 3.6%, up from 3.4% in quarter one. The kiwi looks poorly with further declines on the horizon expected.

The current interbank midrate is: NZDGBP 0.4782 GBPNZD 2.0911

The interbank range this week has been: NZDGBP 0.4771- 0.4844 GBPNZD 2.0643- 2.0959

FX News

NZD/AUD Transfer

The New Zealand Dollar (NZD) has continued to move higher throughout the week reaching 0.9325 (1.0725) against the Australian Dollar (AUD) but it hasn’t been all one-way traffic. Although the cross remains within big picture ranges, movement over the week has certainly not been stagnant. The RBA surprised us by leaving their cash rate unchanged at 4.1% in a hawkish release amid expectation they will raise again down the track. NZ Job’s numbers reached an all-time high with 72.4% of eligible people in the workforce. However, the unemployment rate did jump to 3.6% from 3.45 in the June quarter. This may not be enough for the RBNZ to hold rates at their August 16 meeting, but we should get a better signal when NZ inflation expectations are released on Wednesday. We really do need a big-ticket risk event to shift the NZD/AUD cross out of its long-term range.

The current interbank midrate is: NZDAUD 0.9271 AUDNZD 1.0783

The interbank range this week has been: NZDAUD 0.9231- 0.9318 AUDNZD 1.0732- 1.0832

FX News

Key Points This Week

FX Update

Key Points:

Australian Manufacturing in July 49.6 vs 48.2 expected, with pressures over the past few months easing.

NZ Building Permits for June +3.5% m/m prior -2.2% which is positive, however the number is still down 20% from the June 22 figure.

Chinese media are taking pot shots at Australia again warning of tight ties with the US after the two countries expand military operations together.

US earnings season continues this week with Apple, Amazon and Uber up this week.

German Retail Sales -0.8% vs 0.2% expected in June highlighting poor consumer spending.

July Chinese manufacturing data index (49.3) remains in contraction- the 4th straight month.

The Japanese Yen (JPY) is the strongest performer over the month of July with the US Dollar (USD) the worst performer.