USD

The Australian Dollar (AUD) made gains on the New Zealand Dollar (NZD) last week closing up around ¾ of a percent. The Aussie supported by a range of positive data- The Chinese RMB, rises in precious metals and resources prices including iron Ore rise to 134.50. Last week’s stubborn unemployment at 3.7% and recent interest hike to 4.35% are keeping the Aussie bid. Today’s RBA minutes from the 7th of Nov meeting will be keenly followed as investors look for further clues around forward guidance. 0.9180 (1.0890) has held earlier today with the kiwi looking to recover losses as I write.

Current Level: 0.9201
Resistance: 0.9390
Support: 0.9130
Last Weeks Range: 0.9190 – 0.9283

The double top area at 0.6050 is coming into play with the recent spike in the New Zealand Dollar (NZD). The US Dollar (USD) has been under the pump with talk over the Federal Reserve’s next rate move, possibly a cut. Certainly, recent inflation figures are supporting this when it recently dropped from 3.7% to 3.2% y/y. We should get further clues in tomorrow morning’s Fed minutes. Recently Fed’s Powell reiterated the need for higher bond yields and the 2.0% inflation target was a long way off. A push past 0.6070 could signal further upside for the kiwi, certainly risk sentiment will play a big part in such a move with the geopolitical uncertainty still the no 1 currency mover.

Current Level: 0.6037
Resistance: 0.6200
Support: 0.5850
Last Weeks Range: 0.5862 – 0.6053

The New Zealand Dollar (NZD) broke back into the 0.60’s midweek against the US Dollar (USD) after 4 weeks of trading in the high 50’s. US annual Inflation data came in at 3.2% y/y dropping from 3.7% in September, below market forecasts of 3.3%. The drives were gas/energy and utility prices which fell well over 5%. This has raised questions on whether the Federal Reserve are done with rate hikes. Markets have moved in forecasts of when the Fed could start cutting rates from July 2024 to June post the CPI report. Back home- credit card spending cooled as well as risk sentiment, the kiwi Friday is back under 0.6000 at 0.5965 unable to hold above key 0.6000. Still good buying of USD at these levels.

The current interbank midrate is: NZDUSD 0.5965

The interbank range this week has been: NZDUSD 0.5864- 0.6054

Investors targeted the Australian Dollar (AUD) post Australian job’s data Thursday. The Aussie rose from 1.0770 (0.9285) against the New Zealand Dollar (NZD) to reach 1.0840 (0.9225) mid-morning Friday with figures showing unemployment ticked up from 3.6% to 3.7%. The news had punters contemplating prospects of further tightening by the RBA at their next meeting in December. With precious metals having a good run including Iron Ore up at 133.00 per ton we expected the AUD to rally harder than it did. We may see catch-up AUD buying over the coming days, certainly a retest of 0.9140 (1.0940) could be achievable.

The current interbank midrate is: NZDAUD 0.9218 AUDNZD 1.0838

The interbank range this week has been: NZDAUD 0.9200- 0.9281 AUDNZD 1.0774- 1.0869

How wrong we were post the RBA release last week. Usually, a hike to rates creates buyer interest in the corresponding currency. As the RBA hiked as predicted to 4.35% we saw a small rise in the Australian Dollar (AUD) but this spike wasn’t to last, the currency falling away sharply to end the week around 0.5950 (1.6800) levels. Who knew. The cross tested prior support at 0.5940 (1.6840) before recovering back to 0.5975 (1.6740) this morning. Australian job numbers print later today with forecasts the unemployment rate to rise from 3.6%.

Current Level: 1.6784
Resistance: 1.7010
Support: 1.6500
Last Weeks Range: 1.6452 – 1.6830

How wrong we were post the RBA release last week. Usually, a hike to rates creates buyer interest in the corresponding currency. As the RBA hiked as predicted to 4.35% we saw a small rise in the Australian Dollar (AUD) but this spike wasn’t to last, the currency falling away sharply to end the week around 0.5950 (1.6800) levels. Who knew. The cross tested prior support at 0.5940 (1.6840) before recovering back to 0.5975 (1.6740) this morning. Australian job numbers print later today with forecasts the unemployment rate to rise from 3.6%.

Current Level: 0.5958
Resistance: 0.6060
Support: 0.5880
Last Weeks Range: 0.6452 – 0.6830

UK GDP came in at 0.6% y/y as expected, monthly 0.2% up on the 0.1% markets were expecting confirming the UK economy has flatlined. The good news- the economy hasn’t fallen into a recession with negative growth, but higher borrowing costs look to be hitting where it hurts and will continue to bite for some time as the Bank of England keeps rates high for an extended period. The British Pound (GBP) rose to 1.9220 (0.5205) at the weekly close and has moderately extended this move Monday to 1.9240 (0.5195) against the Australian Dollar (AUD) as markets await this week’s key UK inflation release. Expectations are for a drop from 6.7% to 4.8% y/y which could rally the Pound.

Current Level: 1.9260
Resistance: 1.9400
Support: 1.8995
Last Weeks Range: 1.8975 – 1.9237

Fascinating developments in the New Zealand Dollar (NZD), Euro (EUR) cross have played out exactly as we predicted with the kiwi extending declines to 0.5490 (1.8215). The next point of interest is the long-term support at 0.5475 (1.8265) as it nears this level. A breakout past here and the next stop is 0.5430 (1.8415) With no data to publish on the docket this week we expect recent moves to continue driven by geopolitical risk flow.

Current Level: 1.8201
Resistance: 1.8400
Support: 1.7605
Last Weeks Range: 1.7879 – 1.8142