NZD/AUD Transfer

The Australian Dollar (AUD) continues to outperform the New Zealand Dollar (NZD), the cross reaching 0.9150 (1.0930) earlier this morning as it extends downside moves from mid October’s 0.9425 (1.0610). The cross looks to be teetering around decent support at 0.9140 (1.0940). The Aussie was well supported post a bumper Retail Sales release and talk of central bank divergence with next week’s RBA eyeing a hike. The key data standout this week is NZ employment data with predictions the unemployment rate could rise to 3.9% from 3.6%. The rundown to current levels looks oversold watch for a reversal.

Current Level: 0.9166
Resistance: 0.9230
Support: 0.9150
Last Weeks Range: 0.9163 – 0.9245

 

NZD/USD Transfer

The New Zealand Dollar (NZD) was higher off the weekly open against the US Dollar (USD) pushing to 0.5845 this morning as it extends the rally from last week’s low at 0.5770. We are not sure how much this upside wave has in it with geopolitical risks heating up, but a decent enough level to buy USD at, all things considered. For now, risk appetite has improved based on the Gaza/Israel situation. Equities, commodities, and futures markets were all higher overnight while the safe haven “gold” has fallen back along with Crude Oil -3.5%. It’s a big week of economic data on the docket with NZ employment data releasing tomorrow, unemployment is expected to rise from 3.6% to 3.9%. If the figure comes in low we may see more talk around the RBNZ needing to hike again. The Federal Reserve will announce no change from the 5.50% interest rate before Non-Farm Payroll (NFP) release Friday night. Certainly, anything north of 0.5850 represents decent buying of USD.

Current Level: 0.5838
Resistance: 0.6000
Support: 0.5770
Last Weeks Range: 0.5772 – 0.5871

FX update: Risk uncertainty driving moves

Market Overview

Key Points:

• Risk currencies recovered Monday which is a small miracle if we look at how ugly the markets have been of late. The greenback is lower, and equities have started the week well.
• Australian Retail Sales +0.9% vs +0.3% releasing much higher than predicted. This will be adding to the case for an interest rate hike at the RBA’s 7th November meeting.
• Bank of Canada’s Macklem is suggesting the BoC (Bank of Canada) will need to raise policy to restore price stability. It’s reported that the Canadian economy may be headed for a sharp pullback into a recession early next year.
• Crude Oil has fallen over 3.5% in overnight trading to 82.55 as geopolitical fears in Gaza ease. We expect prices to drop in the coming days as OPEC tightens global supply/demand.
• German inflation eased in October contracting 0.3% y/y for the third quarter to 0.0% from 0.3%. This takes the y/y number to 3.8% down from 4.5%
• The Federal Reserve look to be finished with rate hikes saying they expect rates to stay high for an extended period before aggressive hikes kick in, in 2025.
• The Swiss Franc (CHF) has been the strongest currency in the month of October while the New Zealand Dollar (NZD) has largely underperformed and is by far the worst performer.

Calendar of Economic Releases

Sunday October 29th
3:00pmEURDaylight Saving Time Shift
3:00pmGBPDaylight Saving Time Shift
Monday October 30th
All DayEURGerman Prelim CPI m/m
Forecast 0.20%
Previous 0.30%
9:00pmEURSpanish Flash CPI y/y
Forecast 3.80%
Previous 3.50%
Tuesday October 31st
2:30pmCNYManufacturing PMI
Forecast 50.2
Previous 50.2
TentativeJPYBOJ Outlook Report
TentativeJPYBOJ Policy Rate
Forecast -0.10%
Previous -0.10%
TentativeJPYMonetary Policy Statement
TentativeJPYBOJ Press Conference

Read more

AUD/GBP Transfer

The Australian Dollar (AUD) started the week off on the back foot dropping to 0.5170 (1.9350) against the British Pound (GBP) clocking a 6-week low. Australian CPI printed Wednesday at 5.6% y/y higher than the expected 5.3% and the previous quarters 5.2%. Investors bought up AUD on mass post the release on speculation a hike of their base interest rate is now a given for their Nov 7 meeting. The cross reached 0.5250 (1.9050) before falling back as flight to safety on global worries set in. Next week’s Bank of England policy report and rate announcement should see a pause by the central bank.

The current interbank midrate is: AUDGBP 0.5214 GBPAUD 1.9179

The interbank range this week has been: AUDGBP 0.5170- 0.5258 GBPAUD 1.9016- 1.9339

 

AUD/USD Transfer

The Australian Dollar (AUD) reached 0.6400 midweek climbing off Monday’s open from 0.6310 against the US Dollar (USD) before reversing hard all the way back through 0.6300 as risk mood deteriorated Thursday. Geopolitical uncertainty has gripped markets with worry developing in the Middle East conflict. The Fed added to downside moves, saying they will keep policy higher for longer. Greenback demand evident, the US Dollar index surging. Early Friday we saw the cross post 0.6270, this is the lowest price in the pair since October 2022 and only the 4th time we have seen the cross trade this low this century. Looking ahead, next week we have the Fed rate release and statement and later (NFP) Non-Farm Payroll releasing. No change from 5.5% is predicted.

The current interbank midrate is: AUDUSD 0.6327

The interbank range this week has been: AUDUSD 0.6269- 0.6399

 

NZD/GBP Transfer

The British Pound (GBP) pushed to 0.4775 (2.0950) early week against the New Zealand Dollar (NZD) extending moves higher over the past two weeks creating a 5-week low in the cross. Assisted by better-than-expected UK Manufacturing data, the sector expanding in the month of September, the argument for the Bank of England to “pause” rate increases has come into play at next week’s policy meeting. Prices returned to 0.4820 (2.0740) midweek before more risk off sentiment sent the kiwi reeling again. The 50% Fib support around 0.4775 (2.0950) should hold heading into the weekly close.

The current interbank midrate is: NZDGBP 0.4796 GBPNZD 2.0850

The interbank range this week has been: NZDGBP 0.4770- 0.4822 GBPNZD 2.0734- 2.0964

 

NZD/USD Transfer

The New Zealand Dollar (NZD) looked good Monday rising to 0.5870 against the US Dollar (USD) but stalled around this area as markets turned “risk off” and the kiwi was sold. Global uncertainties in Gaza are attributing to broad buying of USD, the kiwi easing lower into Friday clocking 0.5775 a 1 year low in the pair. A flurry of US data in the form of Durable Goods, advance GDP, 4.9% q/q vs 4.5% forecast, jobless claims and pending home sales have held up the greenback. On the docket next week, we have NZ jobs numbers, unemployment is predicted to rise from 3.6% and key Fed Funds Rate announcement, we expect the Fed to leave rates unchanged at 5.5%. In a very bear market, we expect the kiwi to fall further from current levels. If we look at the chart we see thin air to support at 0.5550. I know it hurts to buy USD at these levels but many need to consider that in several weeks/months we could be staring down the barrel.

The current interbank midrate is: NZDUSD 0.5820

The interbank range this week has been: NZDUSD 0.5772- 0.5869

 

 

 

 

 

 

 

 

NZD/AUD Transfer

The New Zealand Dollar extended declines this week against the Australian Dollar (AUD) reaching 0.9165 (1.0910) a new 26 July 2023 low. The Aussie gained on higher-than-expected CPI in September coming in at 5.6% y/y after 5.3% was forecast. The RBA did not comment on whether they will consider raising rates at their November 7 meeting suggesting the outcome is within range of what they were expecting. We don’t believe a word of it with markets positioning for a rise from 4.10%. Next week’s NZ Jobs data is our focus, unemployment predicted to rise above 3.6%. On the chart downside moves look limited for now with solid support at 0.9175 (1.0900)

The current interbank midrate is: NZDAUD 0.9197 AUDNZD 1.0868

The interbank range this week has been: NZDAUD 0.9163- 0.9244 AUDNZD 1.0817- 1.0913

 

Calendar of Releases

Tuesday October 24th
9:00pm AUD RBA Gov Bullock Speaks

Wednesday October 25th
2:45am USD Flash Manufacturing PMI
Forecast 49.5
Previous 49.8
2:45am USD Flash Services PMI
Forecast 49.9
Previous 50.1
3:00am USD Richmond Manufacturing Index
Forecast 3
Previous 5
1:30pm AUD CPI q/q
Forecast 1.10%
Previous 0.80%
1:30pm AUD CPI y/y
Forecast 5.30%
Previous 5.20%
1:30pm AUD Trimmed Mean CPI q/q
Forecast 1.00%
Previous 0.90% Read more