NZD

The Australian Dollar (AUD) dropped through prior support at 0.6460 this morning against the USD Dollar (USD) extending last week’s slump from 0.6615 to reach 0.6450. This can go one of two ways… the AUD/USD could post a daily close below 0.6450 signalling further declines or we could see a recovery from the AUD of sorts and a bounce back to retest the 0.6550 area. RBA minutes later today should give us clues along with FOMC minutes later in the week. Also, of note Aussie wage price data Thursday should reflect a softening in employment.

Current Level: 0.6485
Resistance: 0.6890
Support: 0.6450
Last Weeks Range: 0.6486 – 0.6616

The New Zealand Dollar (NZD) fell another leg last week dropping to 0.5465 (1.8300) against the Euro (EUR) straight through heavy support at 0.5540 (1.8060) registering a fresh April 2020 level. Setback this week in a thin calendar won’t be to supported, the long term bear channel formation should hold up representing a softer kiwi. The RBNZ releases the official cash rate tomorrow, widely expected to remain at 5.5% for some time with recent interest rate increases impacting into household spending habits.

Current Level: 1.8278
Resistance: 1.8470
Support: 1.7825
Last Weeks Range: 1.7977 – 1.8327

The New Zealand Dollar (NZD) fell another leg last week dropping to 0.5465 (1.8300) against the Euro (EUR) straight through heavy support at 0.5540 (1.8060) registering a fresh April 2020 level. Setback this week in a thin calendar won’t be to supported, the long term bear channel formation should hold up representing a softer kiwi. The RBNZ releases the official cash rate tomorrow, widely expected to remain at 5.5% for some time with recent interest rate increases impacting into household spending habits.

Current Level: 0.5471
Resistance: 0.5610
Support: 0.5415
Last Weeks Range: 0.5456 – 0.5562

The New Zealand Dollar (NZD) remains under pressure against the British Pound (GBP) falling to a long-term low of 0.4715 (2.1220), not seen since March 2020. The GBP outperformed late in the week on better-than-expected economic data- GDP for June came in at 0.5% vs 0.2% showing the economy is growing faster than predicted. This week we have the RBNZ rate announcement which is widely predicted to stay on hold at 5.5% for now through to mid-2024. Later in the week UK CPI y/y prints with expectations inflation should drop to around 6.7%. This in turn is key to determining how much the Bank of England (BoE) will hike at its meeting on September 21st. It’s hard to see the kiwi bouncing back any time soon.

Current Level: 2.1253
Resistance: 2.1420
Support: 2.0900
Last Weeks Range: 2.0842 – 2.1231

The New Zealand Dollar (NZD) remains under pressure against the British Pound (GBP) falling to a long-term low of 0.4715 (2.1220), not seen since March 2020. The GBP outperformed late in the week on better-than-expected economic data- GDP for June came in at 0.5% vs 0.2% showing the economy is growing faster than predicted. This week we have the RBNZ rate announcement which is widely predicted to stay on hold at 5.5% for now through to mid-2024. Later in the week UK CPI y/y prints with expectations inflation should drop to around 6.7%. This in turn is key to determining how much the Bank of England (BoE) will hike at its meeting on September 21st. It’s hard to see the kiwi bouncing back any time soon.

Current Level: 0.4705
Resistance: 0.4785
Support: 0.4670
Last Weeks Range: 0.4710 – 0.4798

Last week’s moves were mostly about AUD strength and investors exiting the New Zealand Dollar (NZD), the pair travelling from 0.9310 (1.0740) to 0.9200 (1.0870) zones where it has consolidated into Tuesday. The RBNZ will keep their interest rate on hold at 5.5% this week after the RBA minutes release later today. Also on the radar is Chinese Industrial Production and Retail Sales printing around the same time which are expected to release below expectations and could be negative to further Aussie moves higher against the kiwi.

Current Level: 1.0863
Resistance: 1.0900
Support: 1.0720
Last Weeks Range: 1.0740 – 1.0869

Last week’s moves were mostly about AUD strength and investors exiting the New Zealand Dollar (NZD), the pair travelling from 0.9310 (1.0740) to 0.9200 (1.0870) zones where it has consolidated into Tuesday. The RBNZ will keep their interest rate on hold at 5.5% this week after the RBA minutes release later today. Also on the radar is Chinese Industrial Production and Retail Sales printing around the same time which are expected to release below expectations and could be negative to further Aussie moves higher against the kiwi.

Current Level: 0.9201
Resistance: 0.9330
Support: 0.9175
Last Weeks Range: 0.9200 – 0.9310

FX Update

Key Points:

• New Zealand food prices gained 9.6% y/y to July with fruit and Veg +6.2%, meat, poultry and fish +9.3% and non-alcoholic beverages +9.1%. Grocery prices +11.9%.
• ANZ has revised down the farmgate milk price for the 2023/2024 season from $8.20 to $7.15.
• NZ Manufacturing dropped in the month of July to 46.3 vs 47.5 in June, the lowest level since January 2023.
• US July Federal deficit 221B vs 109B predicted pushing up yields and downgrading the greenback.
• US CPI y/y printed at 3.2% vs 3.3% expected, up from 3.0% in June.
• Recession worries are diminishing in the US in the small business sector showing optimism in growth.
• The US Dollar (USD) has been the strongest currency this week with the New Zealand Dollar (NZD) and Japanese Yen (JPY) the worst performers.

Last week’s ECB hike still has the Euro in the driver’s seat pushing to 0.5965 (1.6760) at the close of the week against the Australian Dollar. (AUD). Monday’s action has the Aussie still on the backfoot as we head into the week with price clocking 0.5965 (1.6770) a 15-week low. It’s a light week of data which could see the pair bounce around in familiar ranges.

Current Level: 1.6742
Resistance: 1.6765
Support: 1.6260
Last Weeks Range: 1.6338 – 1.6765