USD

Soft US data of late has been positive for the New Zealand Dollar (NZD) rallying the cross to 0.6150 levels early week. A bout of risk off flow since has seen the kiwi drop back towards 0.6120 into Tuesday. Repricing of Fed expectations has the central bank now predicted to cut rates from September. RBNZ is tomorrow with no change expected from 5.5%, however we could see talk of a struggling economy and possibly early 2025 cuts bought forward. Also, on the docket this week is US CPI with 3.1% forecast – down from May’s 3.3%, it won’t be enough. We see chances the kiwi could retest lows around 0.6050 over the week.

Current Level: 0.6131
Support: 0.6050
Resistance: 0.6200
Last week’s range: 0.6046- 0.6147

Prices in the New Zealand Dollar (NZD), Australian Dollar (AUD) pair extended lower to 0.9095 early Friday, approaching support at 0.9065 (1.1030). Australian Retail Sales played a hand in the AUD outperforming the NZD over the week when figures showed a bumper print of 0.6% in May compared to 0.3% expected and 0.1% in April. The RBA minutes confirming the RBA may be forced to raise interest rates at their August meeting advancing on their “higher for longer” mantra with sticky inflation at 3.6%. Next week’s RBNZ Cash Rate Decision shouldn’t bring about any surprises with the central bank to hold rates at 5.5%. Watch for a potential break below 0.9060 areas for a push towards 0.9000 (1.1110)

The current interbank midrate is: NZDAUD 0.9082 AUDNZD 1.1000

The interbank range this week has been: NZDAUD 0.9087- 0.9152 AUDNZD 1.0926- 1.1004

The British Pound extended its range breakout this week reaching 2.0940 (0.4775) against the New Zealand Dollar (NZD) amid UK polling but has since failed to push on, dropping back to 2.0850 (0.4795) Friday. The UK’s Labour party is predicted to take a massive victory over the coming hours ending 14 consecutive years Conservative leadership with around 39% of the vote compared to the Conservatives 22%. We expect the GBP to strengthen towards the weekly close.

The current interbank midrate is: NZDGBP 0.4792 GBPNZD 2.0868

The interbank range this week has been: NZDGBP 0.4776- 0.4830 GBPNZD 2.0702- 2.0938

The New Zealand Dollar (NZD) struggled early week against the US Dollar (USD) falling back to around 0.6050 levels. A little risk on support then reversed the cross higher to 0.6120 in early Friday. The kiwi improving on worse than expected US ISM numbers Wednesday. Next week’s RBNZ meeting will see no change to the 5.50% interest rate. On the periphery is the Presidential campaign which could have a detrimental effect on the NZD, especially if Biden pulls out. US non-farm payroll releases tonight with predictions we may see a poor result putting pressure on the greenback. With signs of disinflation and a slowing labour market in the US the Fed could cut interest rates at their September meeting. A break past 0.6130 is needed for further NZD upside momentum.

The current interbank midrate is: NZDUSD 0.6117

The interbank range this week has been: NZDUSD 0.6046- 0.6128

The Australian Dollar (AUD) has reversed off last week’s fresh yearly high at 0.6250 (1.6000) to fall back to 0.6205 (1.6120) into Tuesday trading. While German inflation cooled from 2.4% expected to 2.2% y/y in June, German unemployment ticked up. French bonds have posted year highs as French President Macron has sunk further behind in the French election polls. However, The Euro has found support but faces an uphill battle as the French election draws closer with uncertainty looming. The far right Rassemblement National party have 33.2% of the vote in the first round of snap elections the first time ever they have gone over 20%. A break past 0.6190 (1.6160) should signal further downside for the Aussie.

Current Level: 1.6144
Resistance: 1.6210
Support: 1.6020
Last Weeks Range: 1.5995- 1.6159

The Australian Dollar (AUD) has reversed off last week’s fresh yearly high at 0.6250 (1.6000) to fall back to 0.6205 (1.6120) into Tuesday trading. While German inflation cooled from 2.4% expected to 2.2% y/y in June, German unemployment ticked up. French bonds have posted year highs as French President Macron has sunk further behind in the French election polls. However, The Euro has found support but faces an uphill battle as the French election draws closer with uncertainty looming. The far right Rassemblement National party have 33.2% of the vote in the first round of snap elections the first time ever they have gone over 20%. A break past 0.6190 (1.6160) should signal further downside for the Aussie.

Current Level: 0.6194
Resistance: 0.6240
Support: 0.6170
Last Weeks Range: 0.6188- 0.6251

The Conservative party led by Rishi Sunak are behind in the polls showing the Labour party have an edge. The British Pound (GBP) has come off the recent long term high at 1.8900 to fight back to 0.5265 (1.9000) into morning trading. Prices at 0.5290 (1.8900) have not been seen since early January. Better than expected UK GDP helped improve the GBP off the weekly open as well. Later today we have RBA minutes who will reconfirm high inflation will keep the cash rate higher for longer. Following this is Australian Retail Sales expected to come in hot.

Current Level: 1.9015
Resistance: 1.9100
Support: 1.8900
Last Weeks Range: 1.8909- 1.9107

The Euro (EUR has extended last week’s moves topside Monday to reach a 4-week high against the New Zealand Dollar (NZD) of 1.7680 (0.5660). Despite President Macron sinking in the French election polls the Euro continues to push higher. French CPI for June came in at 0.1% as predicted, however the Euro will get its cues from incoming French election data over the next couple of days. Meanwhile German CPI in June came in light at 0.1% vs 0.2% forecast with fresh signs the economy is cooling. CPI y/y also cooled at 2.2% in June down off 2.4%. We could see the EUR retest 0.5650 (1.7700) in the coming days.

Current Level: 1.7727
Resistance: 1.7830
Support: 1.7530
Last Weeks Range: 1.7454 – 1.7651