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It’s been one way traffic this week again for the British Pound (GBP) outperforming the Australian Dollar (AUD). The pair started the week around 0.5620 (1.7800) falling into Friday to 0.5525 (1.8100). A weekly close below 0.5515 (1.8135) which isn’t far away and the cross will travel into mid 2022 levels. The RBA pushed interest rates higher Tuesday to 3.6% from 3.35% saying they were nearing the end of their tightening cycle, we are calling this a dovish hike. We may only see 1 hike at the next meeting, the Aussie was sold off post the release leveraged further lower based on equity and risk products taking hits.

The current interbank midrate is: AUDGBP 0.5536 GBPAUD 1.8063
The interbank range this week has been: AUDGBP 0.5537- 0.5628 GBPAUD 1.7766- 1.8058

The Australian Dollar (AUD) retreated to a new November 2022 low of 0.6565 this week against the US Dollar (USD) plunging from around 0.6750 earlier in the week. The Reserve Bank of Australia raised rates from 3.35% to 3.60% as expected with Governor Lowe suggesting they are close to coming to a close on their tightening policy and pausing on further hikes. However more hikes will be needed over the coming months, perhaps only the one instead of two to ensure inflation does indeed start to track lower. In line with this dovish hike were comments from Fed chairman Powell suggesting the opposite may be on the horizon with further hikes above recent estimates and a new upper range of 5.5% to 5.75% possible. This mood should keep the cross on the down slopes for a while until central bank speak changes.

The current interbank midrate is: AUDUSD 0.6600
The interbank range this week has been: AUDUSD 0.6566- 0.6768

The New Zealand Dollar (NZD) surged lower early Friday from 0.5160 (1.9380) to 0.5120 (1.9535) against the British Pound (GBP) extending previous weeks of losses. A breakout through 0.5085 (1.9670) looks to be the next long range target, the 1 November low, through here and the 100 day Moving Average could signal further downside for the kiwi. The UK economy stalled in the fourth quarter of 2022 making next week’s m/m GDP forecast all the more important. They will be doing well to avoid a recession in 2023 with the outlook still weak.

The current interbank midrate is: NZDGBP 0.5133 GBPNZD 1.9481
The interbank range this week has been: NZDGBP 0.5134- 0.5182 GBPNZD 1.9295- 1.9475

The New Zealand Dollar (NZD) posted a fresh lower low over the week of 0.6080 against the US Dollar (USD) before recovering slightly to 0.6130 into Friday. The Federal Reserve remains hawkish with Powell saying stronger than expected economic data over the last few weeks will more than likely push up interest rates past the point thought previously. The Fed chairman is hell bent on taking the economy into recession in order to strangle inflation. The target range is forecast to be 5.5%- 5.75%. Non-Farm Payroll published tonight as may be soft based on this week’s jobless claims. Trend now in the cross is very much to the downside as we edge towards key support at 0.6000.

The current interbank midrate is: NZDUSD 0.6121
The interbank range this week has been: NZDUSD 0.6083- 0.6223

It’s been a slow week for the New Zealand Dollar (NZD), Australian Dollar (AUD) cross with not a lot on the docket. Tuesday’s RBA policy announcement and cash rate was the only notable attraction with the Australian central bank hiking interest rates 25 points to 3.6%. This was negative for the Aussie shifting price from 1.0870 (0.9200) to 1.0700 (0.9345) soon after before reversing back to 1.0800 (0.9260) areas. Further hikes are forecast for the RBA over the coming months to ensure inflation tracks lower to its target band with talk of two more to come. Looking ahead we have key NZ GDP fourth quarter 2022 which is predicted to contract below third quarter’s 2.0%, how far is uncertain but with China “re-opening” their economy- could soften the blow.

The current interbank midrate is: NZDAUD 0.9268 AUDNZD 1.0777
The interbank range this week has been: NZDAUD 0.9181- 0.9346 AUDNZD 1.0699- 1.0892

Tuesday March 7
4:30pm AUD Ivey PMI
Forecast: 55.9
Previous: 60.1
AUD Cash Rate
Forecast: 3.60%
Previous: 3.35%

Wednesday March 8
4:00am USD RBA Rate Statement
10:55am AUD Fed Chair Powell Testifies
11:00pm EUR RBA Gov Lowe Speaks

Thursday March 9
2:15am USD ECB President Lagarde Speaks
4:00am CAD ADP Non-Farm Employment Change
Forecast: 195K
Previous: 106K
CAD BOC Rate Statement
USD Overnight Rate
Forecast: 4.50%
Previous: 4.50%
USD Fed Chair Powell Testifies
7:01am USD JOLTS Job Openings
Forecast: 10.61M
Previous: 11.01M Read more

All eyes are on key Australian inflation data releasing tomorrow with forecasts for CPI y/y to tick higher in January possibly into the 8’s. This comes in contrast to recent forecasts predicting the figure to have peaked in December 2022. Inflation expectations however are predicted to drop in 2023 to around 5.3 from December’s 6.5% – we shall see. Contrasting to Eurozone predictions from ECB’s Nagel who is suggesting March inflation will likely be smaller than expected. A look at the long-term area around 0.6320 (1.5820) is not far away.

Current Level: 0.6348 (1.5752)
Resistance: 0.6515 (1.5900)
Support: 0.6290 (1.5350)
Last Weeks Range: 0.6372-0.6480 (1.5432-1.5693)

British Pound (GBP) strength has overwhelmed the Australian Dollar (AUD) in recent weeks, coming off the early Feb’s 1.7250 (0.5800) to today’s 1.7900 (0.5585). It’s been all about recent data risk supporting the GBP. A retest of January’s 0.5570 (1.7960) is the next target then 0.5475 (1.8270) the February 2022 low. Aussie CPI January is the key release this week with predictions of 7.9-8.0% a rise from the current 7.8% y/y which in turn send the AUD currency higher reversing recent moves.

Current Level: 0.5585 (1.7905)
Resistance: 0.5675 (1.8000)
Support: 0.5555 (1.7620)
Last Weeks Range: 0.5623-0.5751 (1.7386-1.7781)

The Australian Dollar (AUD) fell to 0.6695 off the weekly open against the US Dollar (USD) continuing last week’s declines to an 8-week low. Long term support on the chart is 0.6650, this should hold, this morning recovering to 0.6740 with punters also leaning off the 100-day moving average at 0.6720. This week the RBA will be concerned over rising inflation tomorrow. Expect a healthy push higher if the figure comes in above 7.8%

Current Level: 0.6736
Resistance: 0.6860
Support: 0.6600
Last Weeks Range: 0.6718-0.6918

Eurozone Manufacturing data was mixed, and German economic sentiment came in above forecast, meanwhile the RBNZ raised rates 50 points in a dovish read. This has set the tone of late- the New Zealand Dollar (NZD) retreating lower to 0.5820 (1.7180), the yearly open was circa 0.5960 (1.6780) highlighting Euro momentum in 2023. The Fibonacci chart pattern suggests we could see a reversal back towards support at 1.7060 (0.5860), the 61.8% fib level based on recent higher lows followed by lower lows.

Current Level: 0.5814 (1.7199)
Resistance: 0.5855 (1.7500)
Support: 0.5715 (1.7080)
Last Weeks Range: 0.5823-0.5890 (1.6980-1.7173)