USD

The New Zealand Dollar (NZD) slumped Monday slipping from 0.6200 to 0.6160 in overnight action against the US Dollar (NZD). This morning the kiwi is a little stronger, consolidating around the 0.6180 area. Although the NZD has held its ground over the past couple of weeks, overall, the cross pressure remains to the downside after stalling in the run up to 0.6370 at year end. We would need a break above 0.6250 to confirm further upside. There is a 25% chance the RBNZ could hike rates from 5.5% tomorrow, we are not in this camp. However, if we see prices push higher towards 0.6200 today/tomorrow, this could imply markets are pricing this in.

Current Level: 0.6169
Support: 0.6050
Resistance: 0.6250
Last week’s range: 0.6107- 0.6217

The New Zealand Dollar (NZD) momentum continued well into the week against the British Pound (GBP) the cross reaching a 6-week high of 0.4910 (2.0375). UK Flash Manufacturing came in at 47.1 vs 47.5 expected, falling in the 3 months to February, meanwhile dovish comment from the Bank of England’s Dhingra saying delaying rate cuts would come at substantial costs. NZ Retail Sales published at -1.9% for the December quarter well down from -0.2% predictions and September Q -0.8%. The NZD is weaker post the release falling to 0.4895 (2.0430).

The current interbank midrate is: NZDGBP 0.4891 GBPNZD 2.0445

The interbank range this week has been: NZDGBP 0.4860- 0.4907 GBPNZD 2.0379- 2.0576

NZ Trade Balance blew out to -976m much higher than the -200m forecast. This was lower however than last year’s -2.1B and 2021’s -1.1B. Exports are down -7.1% from a year ago with imports falling 20%. The data didn’t affect the New Zealand Dollar (NZD) too much, the kiwi focusing on the recovery in the equity markets overnight. The cross reaching 0.6215 before easing back to 0.6200 levels into Friday. Next week’s RBNZ meet, we are on the fence as to if the central bank will hike.

The current interbank midrate is: NZDUSD 0.6194

The interbank range this week has been: NZDUSD 0.6106- 0.6217

The New Zealand Dollar (NZD) extended its weekly long rally against the Australian Dollar (AUD) pushing into new heights at 0.9460 (1.0570) as I write. Stiff resistance at 0.9440 (1.0590) came and went, surprising most, breaking clear into a 2024 high. Does this all mean we could see a hike at next week’s RBNZ meeting? Is the market positioning for this event, evidence of the overwhelming support for the NZD?. Also on the docket next week is Australia CPI y/y with early predictions we could see a marked drop from the current 3.4%. It’s highly possible the kiwi has been overbought as it nears Dec 2022 highs, we look for a rebound.

The current interbank midrate is: NZDAUD 0.9442 AUDNZD 1.0581

The interbank range this week has been: NZDAUD 0.9376- 0.9461 AUDNZD 1.0569- 1.0665

The Euro (EUR), Australian Dollar (AUD) continues to bounce around recent levels without much conviction. The cross sits at the edge of range resistance this morning at 0.6080 (1.6450) after coming from the bottom of the band at 0.6025 (1.6600) mid last week. The ECB continues to worry about high inflation while they cut growth forecasts for 2024. A rebound is expected to be more modest than thought but will pick up the pace as prices slow and a strong labour market. French and German manufacturing is this week with forecasts of a pick-up in the sector adding a boost to the EUR.

Current Level: 1.6501
Resistance: 1.6600
Support: 1.6380
Last Weeks Range: 1.6475- 1.6609

The Euro (EUR), Australian Dollar (AUD) continues to bounce around recent levels without much conviction. The cross sits at the edge of range resistance this morning at 0.6080 (1.6450) after coming from the bottom of the band at 0.6025 (1.6600) mid last week. The ECB continues to worry about high inflation while they cut growth forecasts for 2024. A rebound is expected to be more modest than thought but will pick up the pace as prices slow and a strong labour market. French and German manufacturing is this week with forecasts of a pick-up in the sector adding a boost to the EUR.

Current Level: 0.6060
Resistance: 0.6105
Support: 0.6025
Last Weeks Range: 0.6020- 0.6077

The Australian Dollar (AUD) recovered off 0.5120 (1.9520) late in the week to claw back gains to 0.5190 (1.9260) this morning against the British Pound (GBP). Momentum to the downside has been broken with price travelling through the 0.5180 (1.9300) channel resistance area on its way to posting a fortnight high. RBA minutes releases today from their first meeting of 2024, the central bank will no doubt reiterate their concerns of high inflation and their call to hike if needed. Wednesday’s wage price index should confirm upside risks to wage growth and further work required from the RBA. We expect the Aussie to do well over the week.

Current Level: 1.9290
Resistance: 1.9520
Support: 1.9200
Last Weeks Range: 1.9253- 1.9528

The New Zealand Dollar (NZD) tracked higher into the close and extended in early week trading to reach 0.5710 (1.7515) against the Euro (EUR). The cross looks to target the yearly high from early January around 0.5740 (1.7420) as the kiwi gains pace. ECB president Lagarde was on the wires saying “we need to be more confident” that inflation is on track to hit its 2% target before considering rate cuts. NZ Retail Sales prints Friday and could come in much less than expected for the December quarter.

Current Level: 1.7559
Resistance: 1.7900
Support: 1.7500
Last Weeks Range: 1.7516- 1.7699