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Last week’s choppy action in the New Zealand Dollar (NZD), Australian Dollar (AUD) cross saw the pair close around 0.9340 (1.0710). Mondays’ action into Tuesday has seen the kiwi push higher to 0.9365 (1.0680) as the cross continues its mini-NZD Bull run from 0.9160 (1.0920) from the 20th of April. If trend is anything to go off we may see a retest of the yearly high at 0.9435 (1.0600) develop. The chart trendline and moving averages confirms further upside could be at play. The Australian budget releases at 9.30 NZT expected to be decent.

Current Level: 0.9350 (1.0682)
Resistance: 0.9435 (1.0980)
Support: 0.9110 (1.0600)
Last Weeks Range: 0.9232-0.9415 (1.0621-1.0832)

The New Zealand Dollar (NZD) is stronger this morning against the US Dollar (USD) trading around the 0.6350 area boosted by a bounce in equity markets and bond yields. We have seen a good push since the low of 0.6120 in late April but I’m not sure the kiwi has more in it with prices looking overbought and close to resistance levels around 0.6370. Fed’s Jerome Powell has said he is trying to pull a soft US economic landing out of the bag and avoid a recession. Is this possible? no-one knows but with an imminent credit crunch and recent bank failures this will take a toll on the US economy compared to the NZ economy which has a booming labour market which could repel a result nobody wants to see happen. Inflation in the US has been coming down fast of late but may struggle in the medium term to hit the required 2-3% band which could raise chances of a recession. A spurt through 0.6380 levels in this wee rally could be interesting with a possible retest of the yearly high at 0.6535 in sight.

Current Level: 0.6344
Resistance: 0.6500
Support: 0.6100
Last Weeks Range: 0.6160-0.6315

The New Zealand Dollar (NZD) continues its run higher against the British Pound (GBP) Monday extending from last week’s 0.4915 (2.0340) to 0.5030 (1.9877) this morning as the “risk on” mood supported the kiwi. Equity clocked further gains overnight the second day returning over 2% profits. News of the Fed getting close to considering no further hikes has had a “feel good” vibe however considering the long-term outlook by the Bank of England (BoE) to keep hiking this 10-day NZD rally could end suddenly. This week’s Bank of England Cash rate should see a hike of 25 points to 4.50% with the BoE signalling more to follow in the coming months. Resistance on the chart sits at 0.5040 (1.9850), a breakthrough here and we could see further upside.

Current Level: 0.5029 (1.9884)
Resistance: 0.5045 (2.000)
Support: 0.5000 (1.9820)
Last Weeks Range: 0.4913-0.5011 (1.9955-2.0353)

Easing US recession fears has benefited the Australian Dollar (AUD) over the past few days with the currency in demand of late. Price reached 0.6800 early this morning before settling back around 0.6770. This area is close to key resistance on the chart- the daily high 0.6785 going back to late February. Overall, the cross has put in a nice recovery over the last two weeks from the yearly low at 0.6560. Any bullish momentum through here and the pair will be targeting the huge psychological level of 0.7000- but it has a lot of work to do. US CPI Thursday for April and the y/y number is the key standout on the economic docket hopefully providing some clues as to if the Fed can pause its series of hikes. If inflation cools we may see rises in equity indices and the Aussie.

Current Level: 0.6781
Resistance: 0.6800
Support: 0.6700
Last Weeks Range: 0.6606-0.6755

Recent NZ economic data and a surge in risk sentiment has furthered fortunes for the New Zealand Dollar (NZD) sending the currency to 0.5770 (1.7340) levels against the Euro (EUR) Tuesday. It was just mid last week the cross hit 0.5530 (1.8080) the lowest level since August 2020. NZ employment data- 0.8% vs 0.5% the previous quarter together with a decline in the unemployment rate 3.4% vs 3.5% saw the kiwi rally. Last Friday’s ECB rate release saw Lagarde hike to 3.75% from 3.50% as predicted with Lagarde suggesting more rate rises may be needed before a halt to the ECB’s most aggressive ever tightening cycle. We don’t expect Friday’s NZ quarterly inflation read to be shifting prices significantly.

Current Level: 0.5766 (1.7343)
Resistance: 0.5810 (1.8000)
Support: 0.5555 (1.7220)
Last Weeks Range: 0.5605-0.5724 (1.7468-1.7837)

The Australian Dollar (AUD) soured to 0.5375 (1.8600) levels early week against the British Pound (GBP) on RBA news but was unable to hold this area. The RBA surprised markets by raising their interest rate from 3.6% to 3.85% after earlier signals suggested they were finished with tightening. Demand pushed the currency back to last weeks open. Retail Sales helped also with Sales in March stronger than anticipated, the figure growing 0.4% after 0.3% was forecast. Prices Friday are back around 0.5325 (1.8780), the GBP improving on UK Manufacturing Data. Next week’s Bank of England key policy report and rate announcement will be watched closely.

The current interbank midrate is: AUDGBP 0.5323 GBPAUD 1.8786
The interbank range this week has been: AUDGBP 0.5259- 0.5375 GBPAUD 1.8603- 1.9013

The New Zealand Dollar (NZD) has had a good week reversing last week’s losses against the English Pound (GBP) tracking to 0.5002 (1.9990) this morning. We see 3 more rate increases taking place before September from the Bank of England (BoE) as the fight against inflation continues- stubbornly holding above 10%. Manufacturing in the UK printed a 3 month low dragging the Pound lower though Thursday trading, the pair settling around the magical 0.50 (2.00) mark. Carrying the momentum through here will be key today with no data releasing. Looking ahead we have the Bank of England’s official interest rate predicted to rise from 4.25% which may favour the GBP. Resistance seen at 0.5040.

The current interbank midrate is: NZDGBP 0.4998 GBPNZD 2.0008
The interbank range this week has been: NZDGBP 0.4914- 0.5005 GBPNZD 1.9980- 2.0346

The Reserve Bank of Australia unexpectedly raised rates Tuesday 25 points to 3.85% after maintaining it at 3.6% in April, the 11th time the RBA has raised in the past year. This was motivated by the RBA’s worry of inflation which is currently 7.0%, way too high with the labour market remaining tight. The Australian Dollar (AUD) rose to 0.6715 post the release before tapering off back to 0.6640 over the following hours. The Fed also raised their interest rate to 5.25% from 5.0%, the Fed saying this ‘maybe it’ after a long run of hikes. Markets are still pricing an 85% chance that the Fed will start cutting rates by year end despite the ongoing rhetoric by the Fed. We are not sure the Aussie will carry this momentum into next week with Non- Farm Payroll releasing tomorrow morning.

The current interbank midrate is: AUDUSD 0.6990
The interbank range this week has been: AUDUSD 0.6608- 0.6716

The New Zealand Dollar (NZD) has put in a stellar performance this week- not only against the US Dollar (USD) but across the main G10 board. Rising to reach 0.6295 early today prior to dropping back to 0.6270 as I write. Fed raised their cash rate from 5.0 to 5.25, quite possibly the last hike in the long hiking cycle by the Federal Reserve, the 9th hike in a row going back to March last year. Interestingly markets are still pricing in chances around 85% that the Fed will start cutting rates by year end despite the hawkishness of ongoing rhetoric. NZ Unemployment to March remained at 3.4% after expectations of a rise to 3.5% with participation at a respectable 72.0%. The ongoing high participation rate and strength in the labour market has been a mark of very few borrowers defaulting on debt repayments with the RBNZ saying to date ‘there has been limited signs of distress in lending portfolios’. Orr’s report added the NZ banking system capital and liquidity positions were strong. Retesting 0.6300 levels looks on the cards before the weekly close, a significant run through here however looks unlikely.

The current interbank midrate is: NZDUSD 0.6290
The interbank range this week has been: NZDUSD 0.6160- 0.6297

It was all AUD action early in the week with the Australian Dollar (AUD), New Zealand Dollar (NZD) cross reaching 1.0830 (0.9233) Tuesday post RBA. A surprise hike by the central bank to 3.85% brought back AUD buyers as the AUD rallied. Australian Retail Sales printed mixed results coming in stronger in March than expected but overall data was weak as consumers adjusted to higher interest costs, the report showing the figure grew 0.4% after 0.3% was forecast. While this was the third straight month of rises, a decline of spending on discretionary goods has kept monthly sales down for several months. NZ Unemployment remained at 3.4% with the participation rate a decent 72%, Orr saying borrower defaults remained low and banks showing minimal lending stress, overall capital and liquidity positions were strong. The kiwi kicked into high gear reversing RBA moves into Friday trading downwind to around 0.9390 (1.0650). We aren’t predicting a push higher into the 0.94’s with the NZD looking a tad overbought.

The current interbank midrate is: NZDAUD 0.9387 AUDNZD 1.0650
The interbank range this week has been: NZDAUD 0.9231- 0.9415 AUDNZD 1.0621- 1.0832