USD

The New Zealand Dollar (NZD) recovered off last week’s low around 0.5860 against the US Dollar (USD) to 0.5915 this morning. Risk sentiment recovered for the most part off the back of the recent escalated tensions between Iran and Israel late last week. Equity markets ticked up overnight supporting NZD buys as well, but we would be surprised if we saw prices above 0.5950 in the next day or so with a stiff bias to the downside still looming. On the docket this week we have US Advanced GDP for the March quarter expected to come in light around 2.5% vs 3.4% in the December quarter. A push above the 50-day moving average around 0.5950 and above 0.6000 would signal further upside but this looks a tall order.

Current Level: 0.5925
Support: 0.5860
Resistance: 0.5950
Last week’s range: 0.5850- 0.5952

The past two weeks of moves higher by the New Zealand Dollar (NZD) have been erased this week with price falling from 0.4750 (2.0920) to 0.4720 (2.1200) midweek. NZ inflation came in lower than the predicted 4.3% at 4.0% for the March quarter y/y down from 4.7% in the fourth quarter of 2023, the smallest inflation read since June 2021. The RBNZ still need a 1-3% target, data depending- we should be under 3% by the third quarter this year. We don’t expect rate cuts until September, other analysts are saying November. UK CPI also dipped y/y in March from 3.4% to 3.2% mostly from a slowdown in food inflation. The release lent further support for the GBP in line with a little “risk off” developing over the past few hours. The bear channel in play looks to kick on for a while with price looking like it wants to retest 0.4720 (2.1200)

The current interbank midrate is: NZDGBP 0.4743 GBPNZD 2.1083

The interbank range this week has been: NZDGBP 0.4716- 0.4782 GBPNZD 2.0908- 2.1203

The New Zealand Dollar (NZD) consolidated around 0.5900 early in the week against the US Dollar (USD) after extending moves lower on the strength of the greenback. A little profit taking from the NZD shorts came into play. NZ consumer prices rose less than expected in the first 3 months of the year to March. Year on year inflation came off 4.7% dipping to 4.0% after expectation of a 4.3% read. This makes it the lowest CPI since June 2021. The big dollar is still very well supported with the geopolitical uncertainty in the air. Fed’s Powell has signalled a delay to rate cuts due to stubborn inflation saying they will hold “as long as needed” with the recent data not ideal. We expect prices in the cross to drift back to the low at 0.5860 over the next few days.

The current interbank midrate is: NZDUSD 0.5896

The interbank range this week has been: NZDUSD 0.5858- 0.5952

The Australian Dollar (AUD) has drifted lower over the week against the New Zealand Dollar (NZD) the second week straight coming from 1.0920 (0.9160) to 1.0870 (0.9200) into Friday. CPI y/y for the March quarter came in at 4.0%, down from 4.7% with the largest contributor being Housing costs – rental costs and utilities. The RBNZ reiterated they still have a way to go to achieve their target 1-3% band. Expectations of a return below 3% should happen in the third quarter this year with rate cuts possibly not until the August/October meetings. The kiwi still has a way to go to halt the bear run of late, a breakout through 0.9260 (1.0800) would certainly shift bias back towards the NZD.

The current interbank midrate is: NZDAUD 0.9194 AUDNZD 1.0868

The interbank range this week has been: NZDAUD 0.9158- 0.9208 AUDNZD 1.0859- 1.0919

Same same but different. The Australian Dollar (AUD) hit hard on the geopolitical risk averse tone has fallen to 0.6065 (1.6490) against the Euro (EUR) this morning coming off 0.6110 (1.6370) late last week. We expected prices on the Monday open to be much worse but with a delayed retaliation from Israel of an attack on Iran and President Biden saying the US wouldn’t support such a move the heat came off late Monday. Risks still exist with Israel still considering how and when to respond. Lagarde speaks Thursday morning before Australian Jobs numbers.

Current Level: 1.6498
Resistance: 1.6630
Support: 1.6370
Last Weeks Range: 1.6365- 1.6517

Same same but different. The Australian Dollar (AUD) hit hard on the geopolitical risk averse tone has fallen to 0.6065 (1.6490) against the Euro (EUR) this morning coming off 0.6110 (1.6370) late last week. We expected prices on the Monday open to be much worse but with a delayed retaliation from Israel of an attack on Iran and President Biden saying the US wouldn’t support such a move the heat came off late Monday. Risks still exist with Israel still considering how and when to respond. Lagarde speaks Thursday morning before Australian Jobs numbers.

Current Level: 0.6061
Resistance: 0.6110
Support: 0.6015
Last Weeks Range: 0.6055- 0.6110

The British Pound (GBP) extended gains on the Australian Dollar (AUD) Monday as markets focus on geopolitical risk uncertainty. The AUD/GBP reached 0.5175 (1.9325) as markets turned risk averse. To be fair things could have been a whole lot worse in the cross, the Aussie having found a little demand this morning as it pushed back to around 0.5185 (1.9290). On the docket this week we have UK CPI Wednesday predicted to come in at 3.1% y/y for March compared to 3.4% in February followed by Australian Jobs data Thursday with unemployment expected to tick higher off 3.7%.

Current Level: 1.9323
Resistance: 1.9530
Support: 1.9100
Last Weeks Range: 1.9094- 1.9288

The New Zealand Dollar (NZD) has failed to hold prices around 0.5600 (1.7850) against the Euro (EUR) at the start of the week falling back to 0.5555 (1.8000) in stiff risk off markets. Geopolitical uncertainty following the missile/drone strikes on Iran by Israel certainly could have been a lot worse with only a moderate sell-off in the kiwi. The only data this week of note in the cross is NZ CPI q/q with predictions of a 0.6% rise in prices in the March quarter. This should see the annual number dip to around 4.3% from 4.7% and subsequently put more downward pressure on the NZD.

Current Level: 1.8005
Resistance: 2.1170
Support: 2.0910
Last Weeks Range: 2.0855 – 2.1033