USD

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: 0.5494
Support: 0.5435
Resistance: 0.5680
Last week’s range: 0.5512 – 0.5593

UK inflation Friday expanded at an annual pace of 0.6% in the third quarter of 2023 matching second quarter growth. Monthly this equates to 0.2% beating out expectations of 0.1% but the economy is stagnating. The British Pound (GBP) pushed higher into the weekly close to 0.4820 (2.0750) against the New Zealand Dollar (NZD). Monday prices have extended the decline moving to 0.4800 (2.0840) into Tuesday, equities were softer overnight. This week’s main attraction is UK CPI y/y expected to print considerably lower than last quarter’s 6.7% at 4.8%. If we see a print as predicted this could rally the GBP.

Current Level: 2.0885
Resistance: 2.1210
Support: 2.0410
Last Weeks Range: 2.0616- 2.0815

UK inflation Friday expanded at an annual pace of 0.6% in the third quarter of 2023 matching second quarter growth. Monthly this equates to 0.2% beating out expectations of 0.1% but the economy is stagnating. The British Pound (GBP) pushed higher into the weekly close to 0.4820 (2.0750) against the New Zealand Dollar (NZD). Monday prices have extended the decline moving to 0.4800 (2.0840) into Tuesday, equities were softer overnight. This week’s main attraction is UK CPI y/y expected to print considerably lower than last quarter’s 6.7% at 4.8%. If we see a print as predicted this could rally the GBP.

Current Level: 0.4788
Resistance: 0.4900
Support: 0.4715
Last Weeks Range: 0.4804 – 0.4850

The Australian Dollar (AUD) has started to unwind the strange losses of last week, Monday with price coming off the open’s 1.0795 (0.9265) to 1.0845 (0.9220) this morning. The kind of support we expected last week post the RBA rally. Iron Ore and other precious metal prices are up considerably over the past day or so helping to get the AUD back on track. This week’s Australian employment data Thursday is the main event on the docket with predictions unemployment could rise to 3.7%, something the RBA will be hoping for if the slowing of job ads is anything to go on. Upside in the kiwi could be limited to 0.9150 (1.0930) this week.

Current Level: 1.0840
Resistance: 1.0940
Support: 1.0626
Last Weeks Range: 1.0778 – 1.00895

The Australian Dollar (AUD) has started to unwind the strange losses of last week, Monday with price coming off the open’s 1.0795 (0.9265) to 1.0845 (0.9220) this morning. The kind of support we expected last week post the RBA rally. Iron Ore and other precious metal prices are up considerably over the past day or so helping to get the AUD back on track. This week’s Australian employment data Thursday is the main event on the docket with predictions unemployment could rise to 3.7%, something the RBA will be hoping for if the slowing of job ads is anything to go on. Upside in the kiwi could be limited to 0.9150 (1.0930) this week.

Current Level: 0.9215
Resistance: 0.9410
Support: 0.9140
Last Weeks Range: 0.9178 – 0.9278

The New Zealand Dollar (NZD) has continued its decline against the US Dollar (USD) off the open reaching 0.5870 in early morning. The overall trend in the pair is to the downside with recent moves to 0.6000 stalling out. Equity rises in early November supported the kiwi but as mood sentiment shifts globally the kiwi remains under pressure. US CPI holds our attention tomorrow, a key driver of the greenback. Expectations are for a drop from 3.7% y/y to 3.3% in the third quarter, questions around if the Fed have “done enough” will be tested. The Federal Reserve has been the most aggressive of the central banks of late. A break below massive support at 0.5770 just 1 cent away could spell further falls in the cross.

Current Level: 0.5881
Resistance: 0.6000
Support: 0.5800
Last Weeks Range: 0.5877 – 0.6000

The New Zealand Dollar (NZD) has retraced 50% of last week’s gains from the high at 0.6000 falling lower against the US Dollar (USD) to 0.5904 as I write. Risk sentiment has not been as buoyant this week with equity markets and metal commodities not to mention the Gaza conflict all making markets risk averse. NZ Inflation expectations were revised lower to 2.76% from 2.83% over the next two years with the Cash Rate to stay at 5.50% until Dec 2023 and dip to 4.99% by September 2024. The report also highlighted GDP to be around 1.26% over the next year increasing to 2.15% in two years. Jereme Powell speech at an IMF event this morning was interrupted by climate protesters- he was overheard saying “close the fu#king door”, speaking on inflation he said he would not hesitate to tighten policy further if needed. It would be a brave person to forecast the kiwi back at 0.6000 any time soon.

The current interbank midrate is: NZDUSD 0.5894

The interbank range this week has been: NZDUSD 0.5890- 0.6000

The New Zealand Dollar (NZD), Australian Dollar (AUD) cross has bounced off the key 50% Fibonacci levels at 0.9270 (1.0785) over the past hour, this being the high at 0.9400 (1.0630) and the recent low at 0.9140 (1.0940) suggesting the NZD may be a tad overbought. It wouldn’t surprise us to see prices drift lower to around 0.9215 (1.0850) at the weekly close. The Aussie has struggled all week post the RBA cash rate announcement, the central bank hiking interest rates to 4.35% from 4.10% as predicted but the surprise came when we saw the AUD sell off. Perhaps this was caused by weaker metal prices and a softer Chinese CPI data read?… but strange, nonetheless. Governor Bullock suggested she wouldn’t hesitate to hike again if stubborn inflation remained.

The current interbank midrate is: NZDAUD 0.9256 AUDNZD 1.0797

The interbank range this week has been: NZDAUD 0.9178- 0.9274 AUDNZD 1.0782- 1.0895

The Euro (EUR) was slayed last week falling to 1.6450 (0.6080) levels against the Australian Dollar (AUD) as risk on flow demand stimulates the AUD. The cross wasn’t able to kick on past long-term support at 0.6080 (1.6450), bouncing back towards 0.6050 (1.6530) this morning. ECB’s Holzmann said the ECB must be prepared to raise interest rates again if needed, confirming that rates would not be cut any time soon. The ECB left rates unchanged in late October after 10 consecutive hikes. Today’s RBA meeting will confirm a hike in their interest rate from 4.10% to 4.35%. We expect a retest of 0.6080 (1.6450).

Current Level: 1.6520
Resistance: 1.6600
Support: 1.6460
Last Weeks Range: 1.6454 – 1.6759