USD

The survey of New Zealand Inflation expectations 1 year out dropped from 2.40% to 2.05% and the 2-year prediction increased from 2.03% to 2.12%. The report also showed the RBNZ OCR forecast until Dec 2024 is 4.25% and out to September 2025 – 3.25%. Markets seem to be on the fence with either a 50-point cut, or a 75-point cut at the Nov 27 meeting.  The New Zealand Dollar (NZD) remains steady Monday against the US Dollar (USD) around the 0.5960 level having bounced off 0.5975 earlier. US CPI y/y is expected to print higher for October to 2.6% up from 2.4% and could push the kiwi lower into the close of the week.

Current Level: 0.5968
Support: 0.5930
Resistance: 0.6030
Last week’s range: 0.5910 – 0.6037

The Euro (EUR) has performed poorly this week against most main board currencies and has slumped against the Australian Dollar (AUD) to 0.6140 (1.6280) Wednesday before retracing moves back to 0.6125 (1.6330) in early morning. The RBA held interest rates at 4.35% Tuesday siting upside risks to inflation with messy govt electricity subsidies and automotive fuel prices influencing policy. We predict prices to retest the 0.6200 (1.6150) resistance zone.

Current Level: 1.6337
Resistance: 1.6620
Support: 1.6000
Last Weeks Range: 1.6301- 1.6599

The Euro (EUR) has performed poorly this week against most main board currencies and has slumped against the Australian Dollar (AUD) to 0.6140 (1.6280) Wednesday before retracing moves back to 0.6125 (1.6330) in early morning. The RBA held interest rates at 4.35% Tuesday siting upside risks to inflation with messy govt electricity subsidies and automotive fuel prices influencing policy. We predict prices to retest the 0.6200 (1.6150) resistance zone.

Current Level: 0.6121
Resistance: 0.6250
Support: 0.6020
Last Weeks Range: 0.6024- 0.6134

The RBA held interest rates unchanged Tuesday at 4.35% as we expected emphasising the need to remain focused on upside risks to inflation. The Australian Dollar (AUD) rising to 0.5055 (1.9780) before returning to post 0.5112 (1.9560) as US Election voting kicked in. The first rate cut for the RBA may not come until the February meeting in 2025. The RBA may wait until the 4th quarter CPI release on the 29th of January 2025 before making a decision on this. The Bank of England are widely expected to cut 25 points in the morning to 4.75% however they may signal a shallower easing cycle if new budget forecasting comes into play.

Current Level: 1.9607
Resistance: 1.9840
Support: 1.9340
Last Weeks Range: 1.9572- 1.9884

Price action in the Euro (EUR), New Zealand Dollar (NZD) cross has been dictated by US Elections results with the Euro selling off to 0.5565 (1.7970) from 0.5485 (1.8230) over the past couple of days. Markets clearly expecting a Trump presidency. NZ unemployment rose to 4.8% from 4.6% in the second quarter, employers shedding workers until cost pressures ease. This “if anything” confirming further interest rate cuts are needed with prospects now the RBNZ may cut 75 points later this month instead of 50 points.

Current Level: 1.8066
Resistance: 1.8200
Support: 1.8000
Last Weeks Range: 1.7833 – 1.8071

Price action in the Euro (EUR), New Zealand Dollar (NZD) cross has been dictated by US Elections results with the Euro selling off to 0.5565 (1.7970) from 0.5485 (1.8230) over the past couple of days. Markets clearly expecting a Trump presidency. NZ unemployment rose to 4.8% from 4.6% in the second quarter, employers shedding workers until cost pressures ease. This “if anything” confirming further interest rate cuts are needed with prospects now the RBNZ may cut 75 points later this month instead of 50 points.

Current Level: 0.5535
Support: 0.5470
Resistance: 0.5555
Last week’s range: 0.5472- 0.5552

It’s been far to “risky” a week with all that’s been going on for the New Zealand Dollar (NZD) to gain any real momentum. The kiwi slipping lower from 2.1590 to 2.1770 amid US election action over the past day or so against the British Pound (GBP). NZ unemployment ticked up from 4.6% to 4.8% in the second quarter but lower than forecast of 5.00%, annual wage inflation slowing for the 6th straight month. Unemployment is expected to continue rising giving support to much further interest rate cuts by the RBNZ. Attention now lies with Friday mornings Bank of England (BoE) cash rate with a 25-point cut to 4.75% predicted.

Current Level: 2.1677
Resistance: 2.1900
Support: 2.1560
Last Weeks Range: 2.1516- 2.1843

It’s been far to “risky” a week with all that’s been going on for the New Zealand Dollar (NZD) to gain any real momentum. The kiwi slipping lower from 2.1590 to 2.1770 amid US election action over the past day or so against the British Pound (GBP). NZ unemployment ticked up from 4.6% to 4.8% in the second quarter but lower than forecast of 5.00%, annual wage inflation slowing for the 6th straight month. Unemployment is expected to continue rising giving support to much further interest rate cuts by the RBNZ. Attention now lies with Friday mornings Bank of England (BoE) cash rate with a 25-point cut to 4.75% predicted.

Current Level: 0.4613
Resistance: 0.4640
Support: 0.4565
Last Weeks Range: 0.4578- 0.4650

With all the currency heat going on amid US elections we have seen the Australian Dollar (AUD), New Zealand Dollar (NZD) cross trade within recent ranges. The Aussie getting a little more bids this week extending off last week’s moves from 0.9090 (1.1000) to 0.9040 (1.1065) this morning. Early week the RBA held their interest rate at 4.35% saying upside risk to inflation remains. Last week’s inflation drop from 3.8% to 2.8% y/y is still too high. Unemployment in NZ rose from 4.6% to 4.8% for the second quarter slightly less than the 5.00% forecast. Third quarter employment participation numbers are predicted to fall further putting stress on high interest rates. Support at 0.9000 (1.1110) may not hold till xmas.

Current Level: 1.055
Resistance: 1.1150
Support: 1.0980
Last Weeks Range: 1.0963 – 1.1054