USD

We have been a little unsure how the AUD has lost ground against the New Zealand Dollar (NZD) this week, the kiwi starting well clocking 0.9140 (1.0940) but was unable to hold this level heading into the RBA meeting Tuesday. The RBA held their cash rate at 4.35% in a hawkish read, Governor Bullock saying it’s premature to be thinking about cuts with strong jobs data and stubborn inflation. Today’s Australian CPI y/y should post a decent fall form 3.8% to around 2.8% – perhaps markets are pricing this in allowing for a softer AUD?. We certainly don’t expect to much downside in the AUD towards the weekly close and beyond.

Current Level: 0.9205
Resistance: 0.9275
Support: 0.9130
Last Weeks Range: 0.9137 – 0.9207

The New Zealand Dollar (NZD) continues to push into new territory this week against the US Dollar (USD) reaching a new 2024 high of 0.6340 surpassing the previous high around 0.6310 early in the New Year. Record closes in the DOW and S&P certainly have helped the kiwi along with a poor US consumer confidence read overnight. The “big” dollar gave up ground broadly overnight with the index falling below expectations to 98.7, the Fed strangely are still holding firm on non-aggressive easing. Markets are expecting the Fed to cut rates now 75 points by the end of the year with a further 175-200 points cut in 2025. We have US home sales data publishing towards the end of the week. A pullback in the NZD below 0.6300 is expected. Buying USD- “fill ya boots”

Current Level: 0.6348
Support: 0.6250
Resistance: 0.6500
Last week’s range: 0.6151- 0.6266

Prices in the British Pound (GBP), New Zealand Dollar (NZD) moved off 0.4680 (2.1360) Tuesday towards 0.4700 (2.1280) before NZ GDP released pushing the kiwi to 0.4725 (2.1170) into late Thursday. NZ GDP wasn’t as bad as markets were expecting at -0.2% instead of forecast -0.4% putting pressure on the Pound. Last nights Bank of England (BoE) cash rate announcement was reasonably predictable with no change form 5.00%, members voting 8-1 in favour of a “remain” and slightly more hawkish than predicted. Bailey said they will need to be careful not to rush into easing, however the BoE are expected to cut again in November and December. The RBNZ are expected to cut in October and November.

The current interbank midrate is: NZDGBP 0.4695 GBPNZD 2.1299

The interbank range this week has been: NZDGBP 0.4681- 0.4725 GBPNZD 2.1161- 2.1360

The Australian Dollar (AUD) extended moves higher over the week against the New Zealand Dollar (NZD) reaching 1.0945 (0.9135) before falling back earlier this morning to 1.0900 (0.9175) numbers. Thursday’s NZ GDP followed by Aussie job’s data yesterday set the stage for a volatile few hours. NZ GDP initially improved the kiwi to 1.0875 (0.9195) with a print better than expected at -0.2% holding above forecast at -0.4% with stats blaming retail spending, accommodation and food services. Australian jobs numbers ticked up along with unemployment remaining stable at 4.2% boosting the AUD and confirming the RBA won’t cut rates at next week’s policy meeting. We see a push through support at 0.9130 (1.0950) over the coming days as the Aussie builds more momentum.

The current interbank midrate is: NZDAUD 0.9153 AUDNZD 1.0925

The interbank range this week has been: NZDAUD 0.9137- 0.9206 AUDNZD 1.0862- 1.0944

It’s been a “shifty” few days in the New Zealand Dollar (NZD), US Dollar (USD) cross with action between 0.6170 and 0.6270 seen around Federal Reserve and NZ GDP releases. The Fed surprised markets when they cut interest rates from 5.50% to 5.00% instead of 25 points predicted sending the USD rallying. Yes, rallying- we were surprised as anyone to see the kiwi post losses around the release. GDP helped the kiwi push a little higher throughout yesterday’s sessions. Year on year NZ GDP fell back to -0.2%, coming in lighter than the -0.4% we were expecting driven mostly by spending declines in food, accommodation and food services such as restaurant trade. We expect the NZD to retest 0.6300 before the weekly close.

The current interbank midrate is: NZDUSD 0.6235

The interbank range this week has been: NZDUSD 0.6152- 0.6267

The Euro (EUR) hasn’t been able to hold levels around 1.6560 (0.6040) Friday falling back early this week to 1.6480 (0.6070) as risk and the kiwi is better supported in the wake of the ECB cutting rates from 4.25% to 3.65% late last week. Softer Euro economic data hasn’t helped with German Retail Sales and Eurozone industrial production coming in light. Aussie employment data is the main even this week with no change predicted from the current unemployment rate at 4.2%. The ECB president speaks Friday. Our view is a retest of 0.6080 (1.6450) this week.

Current Level: 1.6485
Resistance: 1.6850
Support: 1.6400
Last Weeks Range: 1.645- 1.6628

The Euro (EUR) hasn’t been able to hold levels around 1.6560 (0.6040) Friday falling back early this week to 1.6480 (0.6070) as risk and the kiwi is better supported in the wake of the ECB cutting rates from 4.25% to 3.65% late last week. Softer Euro economic data hasn’t helped with German Retail Sales and Eurozone industrial production coming in light. Aussie employment data is the main even this week with no change predicted from the current unemployment rate at 4.2%. The ECB president speaks Friday. Our view is a retest of 0.6080 (1.6450) this week.

Current Level: 0.6066
Resistance: 0.6100
Support: 0.5935
Last Weeks Range: 0.6013- 0.6079

GDP for August in the UK came in light last week at 0.0% compared to 0.2% predicted, this sank the British Pound (GBP) to 0.5130 (1.9500) levels before rebounding at the close of the week. Into Tuesday we see prices slipping for the GBP to 0.5110 (1.9570) as markets await this week’s slew of economic releases. We will get a look at UK CPI tomorrow with expectations of a “no change” 2.20% y/y  before the Bank of England (BoE) cash rate comes out. Up until a few days ago we were expecting a 5.0% no change result, however we are not so sure with a 25% chance of the central bank cutting to 4.75%. The uncertainty could weaken the GBP over the week.

Current Level: 1.9573
Resistance: 1.9700
Support: 1.9340
Last Weeks Range: 1.9490- 1.9699