USD

The New Zealand Dollar (NZD) closed the week out around 0.9270 (1.0790) against the Australian Dollar (AUD) extending losses throughout the week from 0.9375 (1.0670) numbers. Data out in the form of NZ GDP q/q ending September wasn’t so NZD supportive after printing at -0.3% vs 0.2% expectations lowering the kiwi. Fears of another NZ recession have crept back into conversations with questions being raised on whether the RBNZ have raised too far with 4th quarter growth predictions to worsen. The Aussie was further boosted by Aussie unemployment numbers jumping to 3.9% a June 2022 high despite jobs numbers coming in hot at 61,500 compared to 11,000 predictions. What this means is the central bank will keep rates at 4.25% for longer with the caveat being incoming jobs reports and inflation forecasts. On the chart we saw a small pullback to 0.9295 (1.0760) in the kiwi to start the week but this was short lived with price back around 0.9260 (1.0800) this morning. With no proper data on the docket this week we should see the cross bounce around the 0.9200 (1.0870) – 0.9300 (1.0750) zone.

The current interbank midrate is: NZDAUD 0.9262 AUDNZD 1.0784

The interbank range this week has been: NZDAUD 0.9260- 0.9295 AUDNZD 1.0758- 1.0798

The New Zealand Dollar (NZD) shifted higher late in the week against the US Dollar (USD) pushing into the 0.62’s after a massive re-think in Fed sentiment. Price reached 0.6250 as the Fed delivered their unchanged cash rate announcement. The Fed said they would keep rates as they are until mid-2024 when they expect to cut rates around June, possibly twice more before the end of the year. Earlier US CPI printed at 3.1% y/y bang on forecast throwing doubt into whether the Fed would price in cuts. NZ GDP q/q released at -0.3% down on 0.2% expectations, the economy contracting more than markets were forecasting and stoking fears of another recession is on the cards. Have the RBNZ raised rates too much in efforts to aggressively bring down inflation which is still 5.6%. It’s now a strong likelihood the central bank will consider cutting sooner over later in 2024. Through most of 2023 the kiwi has been mostly bearish, we believe we may have seen a shift to a bullish tone over November with pricing reversing off mid 57’s, strong support is now 0.6000.

The current interbank midrate is: NZDUSD 0.6211

The interbank range this week has been: NZDUSD 0.6187- 0.6250

The New Zealand Dollar (NZD) underperformed towards the end of the week against the US Dollar (USD) falling to 0.6110 levels as strong US data printed. Into Tuesday morning trade we have seen a small perk up in the kiwi to 0.6130 but topside this week could be tough going. We will get a look at US CPI tomorrow, predicted to dip lower from 3.2% to 3.1%. Anything around 3.2% will almost certainly set the scene for another round of interest rate hikes in order to bring down inflation to Fed target levels. Markets however would love to see a decent fall to bring forward rate cuts forecast for third quarter 2024.

The current interbank midrate is: NZDUSD 0.6120

The interbank range this week has been: NZDUSD 0.6104- 0.6131

Higher lows followed by higher highs in December continue to dominate the chart in the Australian Dollar (AUD), New Zealand Dollar (NZD) cross. The bull trend from late last week’s 0.9300 level to 0.9340 early this morning could signal further upside for the kiwi. NZ GDP prints Thursday for the third quarter ending September 30 and should highlight modest growth in the economy (0.2%) However, by removing migration the economy is expected to contract over the next 12 months. Aussie unemployment is predicted to increase slightly off 3.7% Thursday.

The current interbank midrate is: NZDAUD 0.9315 AUDNZD 1.0724

The interbank range this week has been: NZDAUD 0.9306- 0.9339 AUDNZD 1.0707- 1.0745

Risk assets this week have dragged on the New Zealand Dollar (NZD) the currency falling back to 0.6115 against the US Dollar (USD) on renewed greenback demand. Central banks around the globe are starting to talk more about easing policy and dropping rates sooner rather than later. The recent rhetoric around “higher for longer” is now being questioned with the first rate cut now predicted by the RBNZ by August 2024. Non-Farm Payroll prints tonight expected to come in light with unemployment to tick higher from 3.9%. Technically the kiwi looks well capped at 0.6220 and should continue to the downside. A December close below 0.6050 should signal further bearish price moves.

The current interbank midrate is: NZDUSD 0.6162

The interbank range this week has been: NZDUSD 0.6113- 0.6222

The New Zealand Dollar (NZD) extended moves north into Friday against the Australian Dollar (AUD) clocking 0.9390 (1.0650) an 8-week high. The RBA left rates unchanged at 4.35% Tuesday as widely predicted after the central bank hiked in November. New governor Michelle Bullock saying progress to bring down inflation to their target 2-3% band has been slower than forecast. The RBA have no meeting planned in January; we would not expect a further hike at February’s meeting if 4th quarter inflation prints considerably lower than the current 5.4% in late January. Prices in the pair are back around the 0.9345 (1.0700) zone with a little Aussie support in play.

The current interbank midrate is: NZDAUD 0.9339 AUDNZD 1.0699

The interbank range this week has been: NZDAUD 0.9287- 0.9384 AUDNZD 1.0656- 1.0767