NZD

Profit taking on short positions halted the New Zealand Dollar (NZD) from further declines Monday momentarily after the currency came off Friday and into the weekend to 0.5930 areas against the US Dollar (USD). Attacks on Israel from Iran air strikes sent markets into a spin as we all wondered how Israel would counter. With prices down further overnight around 0.5900 heading into Tuesday this represents a huge 2024 low pushing past the prior low at 0.5940 after a higher than forecast March US Retail Sales print. This week’s NZ CPI should reflect a decent dip from 4.7% from 4.3%, anything lower and we could see more downside moves in the kiwi.

Current Level: 0.5904
Support: 0.5800
Resistance: 0.6000
Last week’s range: 0.5933- 0.6082

The New Zealand Dollar (NZD) extended moves from last week’s 0.4725 ( 2.1160) against the English Pound (GBP) posting a fresh 3 week high of 0.4770 (2.0860). The RBNZ kept interest rates on hold at 5.5% Wednesday pushing the kiwi lower to 0.4765 (2.0990). The central bank saying a restrictive policy was still required in efforts to drag down inflation back to a 1-3% target band. The December quarter CPI released at 4.7% but the RBNZ still has a way to go as they remain cautious in the face of stubborn inflation. Personally, we believe the bank should be cutting rates in the late May meeting.

The current interbank midrate is: NZDGBP 0.4778 GBPNZD 2.0929

The interbank range this week has been: NZDGBP 0.4754- 0.4794 GBPNZD 2.0856- 2.1033

The New Zealand Dollar (NZD) shrugged off last week’s losses pushing back above 0.6000 posting a new high midweek of 0.6080 against the US Dollar (USD). This little run up wasn’t to last falling sharply as US inflation data came in, the cross retreating to 0.5965 levels. CPI came in higher than forecast of 3.4% y/y at 3.5%. This is the third straight month prices have increased above expectations. The Fed now will dial back interest rate cuts predicted earlier this year. Inflation cooled at the end of 2023, but the Fed now seems less confident they will see levels around 2.0% targets in 2024 making for a slower pace of cuts. Earlier the Reserve Bank of New Zealand (RBNZ) held interest rates unchanged at 5.5% as widely expected the 6th meeting in a row. The RBNZ said they were confident by leaving rates unchanged will return the inflation rate back to a 1-3% target band within 2024. We are a little surprised at the optimism showed by the RBNZ with growth weak and unemployment about to plunge. Overall direction in the cross is still to the downside.

The current interbank midrate is: NZDUSD 0.6001

The interbank range this week has been: NZDUSD 0.5964- 0.6082

The current interbank midrate is: NZDAUD 0.9175 AUDNZD 1.0893

The interbank range this week has been: NZDAUD 0.9133- 0.9197 AUDNZD 1.0872- 1.0949

The New Zealand Dollar (NZD) has been one of the strongest currencies over the week, rebounding off the weekly close at 0.4740 (2.1090) it has regained losses to reach 0.4770 (2.0960) against the British Pound (GBP). We have no news published to report on this week with all eyes on next week’s RBNZ meeting with no change predicted yet from 5.50%. Trend in the pair is still to the downside with price locked into a bear channel from the high at 0.4900 (2.0400) from late February. A move above prior resistance at 0.4780 (2.0910) could highlight a momentum shift for the kiwi.

The current interbank midrate is: NZDGBP 0.4764 GBPNZD 2.0990

The interbank range this week has been: NZDGBP 0.4730- 0.4775 GBPNZD 2.0942- 2.1138

The New Zealand Dollar (NZD) started the week off in familiar form falling further to 0.5940 off the bat against the US Dollar (USD) giving thought, it was going to be another long week of declines. However, the kiwi reversed on a dime pushing up back into the early 60’s, reaching 0.6045 in late morning US trading as risk currencies were back in favour. Surging commodities and a rebound in US equities have helped, the kiwi shrugging off concerns also of a downbeat RBNZ at next week’s central bank meeting. No change is predicted from 5.5% but we could see discussion of a potential cut at the May 22 meeting. Buyers of USD should consider 0.6000.

The current interbank midrate is: NZDUSD 0.6024

The interbank range this week has been: NZDUSD 0.5938- 0.6045

The New Zealand Dollar (NZD), Australian Dollar (AUD) has held around 0.9150 over the past couple of days, the kiwi looking generally sad as it has declined further over the week from 0.9191 (1.0880) , the 6th week straight. Precious metal prices have boosted the AUD this week, especially copper. Commodity buyers seem more concerned about inflation risk than growth which should keep commodity prices buoyant supporting the AUD. Next week’s RBNZ meeting comes into focus with no shift from 5.5% expected. An upbeat RBNZ governor could send the kiwi lower.

The current interbank midrate is: NZDAUD 0.9144 AUDNZD 1.0923

The interbank range this week has been: NZDAUD 0.9128- 0.9272 AUDNZD 1.0784- 1.0955

The New Zealand Dollar (NZD) hasn’t been able to regain an edge against the British Pound (GBP) this week after dropping in value last week to 0.4760 (2.10). Prices in the cross have progressed through to 0.4755 (2.1035) into Tuesday trading just shy of last week’s low and September 2023 levels. No data publishing this week, last week’s poor NZ growth data should keep the kiwi on the back foot with the Bank of England (BoE) unlikely to lower rates any time soon.

The current interbank midrate is: NZDGBP 0.4753 GBPNZD 2.1039

The interbank range this week has been: NZDGBP 0.4746- 0.4768 GBPNZD 2.0972- 2.1068

The New Zealand Dollar (NZD) slipped below the key 0.6000 level against the US Dollar (USD) late last week closing around the 0.5995 mark. Last week’s gloomy growth release is taking a toll on the kiwi, adding in some less than dovish speak from the Federal Reserve and the NZD has and could continue to struggle. Overnight we saw a rebound to 0.6030 but declined back to 0.6000 as I wrote. The importance of having orders in the market, this is a good example. Over the next day or so we will get a read on how markets are perceiving the strength in the NZD. The longer the cross trades around 0.6000 the harder the break to the downside could be.

The current interbank midrate is: NZDUSD 0.6002

The interbank range this week has been: NZDUSD 0.5982- 0.6030

The Australian Dollar (AUD) continues to go from strength to strength against the New Zealand Dollar (NZD) with the cross reaching 0.9175 (1.0900) early this morning a fresh 3rd of November low. Pricing around 0.9140 (1.0940) is the next stop in the pair for support. Through this zone and we are targeting 0.9075 (1.1020) the lowest daily close since October 2022. On the topside any push back through 0.9245 (1.0820) would indicate a momentum shift. Australian CPI y/y for February prints later today and could strengthen the Aussie further if the data is higher than the 3.5% forecast.

The current interbank midrate is: NZDAUD 0.9184 AUDNZD 1.0883

The interbank range this week has been: NZDAUD 0.9173- 0.9231 AUDNZD 1.0832- 1.0901