The energy crisis may well be over, for now, but another crises remains just around the next corner. Equities and Bonds celebrated the end to the conflict, as US share markets reach record highs, while bond yields drift lower. Confidence has returned to markets but volatility and imminent threats remain likely. Deficit/debt in Western economies remain an existential threat to markets. Inflation will remain a problem as long as fiscal crises drives massive government borrowing. US Dollar safety is likely to remain a preferred option.
The Middle East war and subsequent global energy crises, surged flows to the safety of the US Dollar. This crushed the NZD, which fell below 0.5650, along with all measured currencies against the US Dollar reserve. The apparent end to hostilities, has allowed a recovery in the kiwi, which has recently regained 0.5700. This rebound was aided by the prospects of an anticipated interest rate rise, from the RBNZ. The NZ Central Bank is expected to reverse a lengthy period of rate cuts, raising rates by 25 basis point. This will boost the NZD, in the short term, but add pressure to borrowers.
Current Level: 0.5702
Support: 0.5630
Resistance: 0.5800
Last week's range: 0.5630- 0.5724
The NZD/AUD cross rate has been fairly stable, trading around 0.8200 (1.2195), as both currencies were hammered by the global energy crises. The hawkish mood of the RBNZ, may add some upward momentum to the cross-rate, allowing gains in the short term. This will not be for long, as Australian interest rate differentials remain favourable, to the Australian currency.
Current Level: 0.8193
Support: 0.8130
Resistance: 0.8240
Last week's range: 0.8175-0.8243
Current Level: (1.2195)
Support: (1.2135)
Resistance: (1.2300)
Last week's range: (1.2131-1.2231)
The weaker NZD forced the GBP cross-rate back to 0.4250 (2.3529), but the rebound following the cessation of the energy crises, has allowed the rate to head back towards 0.4300 (2.3255). If the RBNZ decides to raise rates this week, then we may see further gains in the cross-rate. The British Pound has been relatively stable, but political pressures and fiscal troubles may well add to downward pressure in the Pound.
Current Level: 0.4255
Support: 0.4245
Resistance: 0.4315
Last week's range: 0.4257-0.4289
Current Level: (2.3501)
Support: (2.3170)
Resistance: (2.31550)
Last week's range: (2.3314-2.3490)
The NZD underperformance, during the energy crises, forced the NZD/EUR cross rate back down to below 0.4950 (2.0200). The ceasefire and peace negotiations have allowed a recovery in the KIWI and the cross rate has improved, heading back towards 0.5000. The driving force and major determinant of the reserve currency, will ensure a tight trading range in the short-term.
Current Level: 0.4980
Support: 0.4945
Resistance: 0.5000
Last week's range: 0.4942-0.4999
Current Level: (2.0080)
Support: (2.0000)
Resistance:(2.0230)
Last week's range: (2.0004-2.0233)
The AUD was smashed during the energy crises, ironically, for the massively resource rich economy. Australia, like many Western Countries, has allowed their energy independence to be sold off to globalism. The vulnerability of this was exposed during the Middle East war and global energy crises. The AUD tumbled to below 0.6900, as reality hit home, only to show signs of life, in the last week. There are many challenges faced by the Australia economy and not much political acumen to fix existential problems.
Current Level: 0.6955
Support: 0.6860
Resistance: 0.7070
Last week's range: 0.6863- 0.6949
The GBP was suffering before the Middle East crises sparked up, with massive fiscal issues dragging the currency lower. These issues remain, as does the political uncertainty as the Labour Government, look to change leadership. This will not help as the fish rots from the head down. It is political incompetence, from both major parties, that has brought the once prosperous Great Britain to this precarious situation. Expect more downside in the Pound.
Current Level: 0.5191
Support: 0.5165
Resistance: 0.5230
Last week's range: 0.51650-0.5228
Current Level: (1.9264)
Support: (1.9120)
Resistance: (1.9360)
Last week's range: (1.9127-1.9359)
The collapse in the AUD pushed the cross-rate to trade around 0.6000. The AUD was an underperformer in a sea of underperformers. Australian economic problems were there before the energy crises and they remain today. The cross rate has bounced off 0.6000, as the Middle East ceasefire takes effect, but vulnerabilities remain.
Current Level: 0.6077
Support: 0.6025
Resistance: 0.6135
Last week's range: 0.6017-0.6070
Current Level: (1.6455)
Support: (1.6300)
Resistance: (0.6135)
Last week's range: (1.6472-1.6617)
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