USD

The New Zealand Dollar (NZD) has struggled over the week against a storming Australian Dollar (AUD), the cross reaching 0.9180 (1.0890) in one way traffic. The RBA decision saw the cash rate stay unchanged at 4.35% while the central bank hasn’t ruled out further rate hikes if price pressures remain elevated and stubborn. NZ GDP for the first quarter of 2024 ending March came in at 0.2% surprising markets after 0.1% was expected. We always thought even 0.1% was to high given recent economic events, but while data has worsened over May and June we expect the second quarter data to send NZ back into a recession. Aussie CPI next week holds our interest on the calendar with predictions this will print just below the current 3.6%.

The current interbank midrate is: NZDAUD 0.9187 AUDNZD 1.087

The interbank range this week has been: NZDAUD 0.9181- 0.9294 AUDNZD 1.0759- 1.0891

The Australian Dollar (AUD) has reversed some of the gains made last week falling back against the Euro (EUR) to 0.6150 (1.6260)  from 0.6195 (1.6150) in the aftermath of the European election results. We aren’t expecting any surprises in today’s RBA cash rate announcement with the central bank expected to keep the rate at 4.35%. Governor Bullock’s statement should give us further clues as to whether the RBA keep their policy rhetoric around inflation risks or change the ballgame.

Current Level: 1.6228
Resistance: 1.6400
Support: 1.6150
Last Weeks Range: 1.6148- 1.6384

The Australian Dollar (AUD) has reversed some of the gains made last week falling back against the Euro (EUR) to 0.6150 (1.6260)  from 0.6195 (1.6150) in the aftermath of the European election results. We aren’t expecting any surprises in today’s RBA cash rate announcement with the central bank expected to keep the rate at 4.35%. Governor Bullock’s statement should give us further clues as to whether the RBA keep their policy rhetoric around inflation risks or change the ballgame.

Current Level: 0.6162
Resistance: 0.6190
Support: 0.6100
Last Weeks Range: 0.6103- 0.6192

Range trading in the British Pound (GBP), Australian Dollar pair continue with prices around 0.5210 (1.9200) into Tuesday. We expect a little more volatility over the week with both the Bank of England (BoE) and the Reserve Bank of Australia (RBA) announcing rate statements. Both are expected to keep rates unchanged, but the RBA could be hawkish. This would be good for the AUD if rate policy rhetoric remains “higher for longer”. As for the BoE – members are expected to vote 7-2 in favour of a “hold”. UK inflation prints tomorrow and is predicted to dip from 2.3% y/y to 2.0% supporting cuts to come. We expect price to retrace to retest 0.5240 (1.9090) over the week.

Current Level: 1.9208
Resistance: 1.9400
Support: 1.9090
Last Weeks Range: 1.9145- 1.9342

The Euro (EUR) fought back Monday to 1.7540 (0.5700) from 1.7390 (0.5750) against the New Zealand Dollar (NZD) in the wake of a 7-week slide. The Euro getting assistance from Marine Le Pen assurances saying she will co-operate with Macron if she wins the French election. On the calendar NZ GDP prints Thursday and is expected to come in at 0.1% in the first quarter of 2024. We would be very surprised if we see a positive result. We expect further downside in the kiwi this week.

Current Level: 1.7503
Resistance: 1.7700
Support: 1.7400
Last Weeks Range: 1.7388 – 1.7668

The Euro (EUR) fought back Monday to 1.7540 (0.5700) from 1.7390 (0.5750) against the New Zealand Dollar (NZD) in the wake of a 7-week slide. The Euro getting assistance from Marine Le Pen assurances saying she will co-operate with Macron if she wins the French election. On the calendar NZ GDP prints Thursday and is expected to come in at 0.1% in the first quarter of 2024. We would be very surprised if we see a positive result. We expect further downside in the kiwi this week.

Current Level: 0.5713
Support: 0.5650
Resistance: 0.5750
Last week’s range: 0.5659- 0.5751

The New Zealand Dollar (NZD) bounced off resistance at 0.4840 (2.0650) late Friday against the British Pound (GBP) to trade back at 0.4830 (2.0700) into Tuesday trading. The GBP looks to retest last week’s low at 0.4795 (2.0860), however UK CPI will dictate moves. Inflation is predicted to drop in May from 2.3% y/y to 2.0% making it the lowest rate since July 2021. Inflation has fallen massively since the Oct 2022 high of 11.1%. The Bank of England’s target of 2.0% might eventuate bringing about cuts later in the year.

Current Level: 2.0721
Resistance: 2.0920
Support: 2.0600
Last Weeks Range: 2.0632- 2.0858

The New Zealand Dollar (NZD) bounced off resistance at 0.4840 (2.0650) late Friday against the British Pound (GBP) to trade back at 0.4830 (2.0700) into Tuesday trading. The GBP looks to retest last week’s low at 0.4795 (2.0860), however UK CPI will dictate moves. Inflation is predicted to drop in May from 2.3% y/y to 2.0% making it the lowest rate since July 2021. Inflation has fallen massively since the Oct 2022 high of 11.1%. The Bank of England’s target of 2.0% might eventuate bringing about cuts later in the year.

Current Level: 0.4826
Resistance: 0.4855
Support: 0.4780
Last Weeks Range: 0.4794- 0.4846

Price action in the New Zealand Dollar (NZD), Australian Dollar (AUD) was flat last week pivoting around 1.0760 (0.9295) area. Monday the Aussie is looking to regain the edge pushing up to 1.0790 (0.9270) heading into Tuesday. Today’s RBA cash rate announcement should see the rate remain unchanged at 4.35% the fifth straight meeting with investors keen to hear from Governor Bullock as to her forecast for rate policy over the medium to long term. Surely she will come off the hawkish tone of late and start to consider bringing forward rate cuts from mid-2025. The risks of the economy falling into a recession is greater if they decide to hold rates too long. We see risks to the downside for the kiwi this week.

Current Level: 1.0779
Resistance: 1.0870
Support: 1.0720
Last Weeks Range: 1.0731 – 1.0796