USD

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: 0.9040
Resistance: 0.9110
Support: 0.8970
Last Weeks Range: 0.9046 – 0.9121

The New Zealand Dollar (NZD) slumped off 0.6000 numbers to post 0.5910 against the surging US Dollar (USD) overnight as US elections came in. The greenback made big moves across the main board as news of a new Trump led government became reality. The Republican party has gained enough support in both the US Senate and US Congress, this making it easier for the new president to implement “Dollar” positive economic plans such as lower taxes and tariffs. His policies will most likely lead to increased spending impacting inflation. Tomorrow morning’s Fed meeting markets have priced in a 25-point cut to 4.75% but past this point cuts look shady. Long term support in the cross still sits at 0.5850 the lows from late July and mid-April, we pick a retest of this zone in the coming weeks.

Current Level: 0.5942
Support: 0.5850
Resistance: 0.6200
Last week’s range: 1.6300 – 1.6598

The English Pound (GBP) extended its run over the New Zealand Dollar (NZD) through midweek to 2.1840 (0.4580) was unable to hold this level. Comments by chancellor Reeves translated into rates staying higher for longer helping to buoy the Pound. The GBP declined sharply following the UK budget starting a selloff in UK bonds post the announcement of big tax rises on the horizon. The cross shifted from 0.4610 (2.1700) to trade back at 0.4635 (2.1570) early Friday. Next week’s NZ Jobs data and more importantly the Bank of England (BoE) Cash Rate shouldn’t disappoint.

The current interbank midrate is: NZDGBP 0.4632 GBPNZD 2.1587

The interbank range this week has been: NZDGBP 0.4578- 0.4638 GBPNZD 2.1558- 2.1843

Consensus for a 75-point rate cut at this months RBNZ meeting is gathering pace with a dovish economic outlook undermining policy. The New Zealand Dollar (NZD) has been choppy over the week against the US Dollar (USD), the US presidential election keeping a risk off tone, the kiwi reaching a low of 0.5940 before bouncing back into early Friday to 0.5970 levels. ADP jobless claims came in slightly ahead of forecast at 233,000 compared to 113,000 estimates with attention now to Non-Farm Payroll releasing tonight. Anything hot and we could see a shift in policy by the Fed and a lift in the greenback.

The current interbank midrate is: NZDUSD 0.5977

The interbank range this week has been: NZDUSD 0.5939- 0.6001

The New Zealand Dollar (NZD), Australian Dollar (AUD) ticked higher over the week from 0.9050 (1.1050) to reach 0.9120 (1.0965) midweek before the kiwi gave back gains into Friday to 0.9075 (1.1020). Australian CPI y/y came in at 2.8% dropping a whopping 1% from 3.8%, the lowest reading since Q1 2021 with declines mainly in electricity and fuel prices. Aussie Retail Sales came in light at 0.1% compared to 0.3% dropping the AUD marginally. Next week’s RBA cash rate should bring a “hold” at 4.35% and not really create any fanfare. The release could we be overshadowed by Melbourne Cup and US Presidential Elections. One would expect if anything, the AUD could retest 0.9010 (1.1100) over the coming days.

The current interbank midrate is: NZDAUD 0.9081 AUDNZD 1.1009

The interbank range this week has been: NZDAUD 0.9046- 0.9122 AUDNZD 1.0962- 1.1054

Hawkish comments from the ECB have buoyed the Euro (EUR) higher Monday against the Australian Dollar (AUD) pushing to 1.6500 (0.6060) a fresh 7 week high in the cross as it extends off last week’s 1.6140 (0.6200). ECB’s Wunsch said he had no urgency to cut rates, while a 50-point cut at the December meeting looks the ticket pending incoming data.

Current Level: 1.6501
Resistance: 1.6620
Support: 1.6400
Last Weeks Range: 1.6137- 1.6310

Hawkish comments from the ECB have buoyed the Euro (EUR) higher Monday against the Australian Dollar (AUD) pushing to 1.6500 (0.6060) a fresh 7 week high in the cross as it extends off last week’s 1.6140 (0.6200). ECB’s Wunsch said he had no urgency to cut rates, while a 50-point cut at the December meeting looks the ticket pending incoming data.

Current Level: 0.6060
Resistance: 0.6100
Support: 0.6020
Last Weeks Range: 0.6131- 0.6196

The Australian Dollar (AUD) is setting up for the lowest weekly close against the British Pound (GBP) since August 2023 with price continuing to slip to 0.5040 (1.9840). Less than impressive UK Manufacturing and a slide in the Lloyds business barometer haven’t had much impact with overpowering sentiment towards risk off, a lot of this stemming from the upcoming US elections. Today’s Aussie CPI y/y should highlight drops in many consumer products with expectations the figure should fall to 2.9% from June quarters 3.8%. The Aussie may continue to weaken towards next week’s RBA.

Current Level: 1.9857
Resistance: 2.0000
Support: 1.9600
Last Weeks Range: 1.9358- 1.9640