The war in the Middle East is escalating, as Yemen joins Iran, with missile attacks on Israel. The longer the war extends the more likelihood of a global recession. The impact is felt hardest in energy dependent Countries, including much of Europe and the Asia/Pacific zone. Energy prices will fuel inflation, tipping much of the world into a global recession. This will kill commodity demand, prices and the associated currencies. A solution to the war needs to be found and fast, to avoid economic crises across the world. Markets will begin to take note of, and react to, economic data as inflationary pressures filter through into the data.
USD - Fed Chair Powell Speaks
NZD - RBNZ Gov Breman Speaks
JPY - National Core CPI y/y 1.6% v 1.7% expected
AUD - CPI y/y 3.7% v 3.8% expected
GBP - CPI y/y 3.0% (expected)
USD - Unemployment Claims 210k v 211k expected
GBP - Retail Sales m/m -0.4% v -0.6% expected
The Middle East crises is no closer to a conclusion and is escalating, as Yemen joining the Iranians, with a missile attack on Israel. Oil prices are surging above US$100pb, igniting inflation across the West, with the latest CPI reading from Germany showing a big spike. This is the first reading, including the period of the war, showing inflation jumped from 1.9% to 2.7%. The safety of the US Dollar took its toll on the KIWI, which looks set to fall below 0.5700.
Current Level: .5719
Support: .5600
Resistance: .5900
Last week's range: .5730 - .5845
The NZD/AUD cross has been largely ignored, as both have suffered the flight to the safety of the reserve currency. The cross rate has traded between 0.8300 and 0.8380. The tight trading range is likely to continue, while the focus is on the Geo-Politics of the Middle East crises.
Current Level: 0.8348
Support: 0.8300
Resistance: 0.8600
Last week's range: 0.318-0.8375
Current Level: 1.1967
Support: 1.1880
Resistance: 1.2100
Last week's range: 1.1939-1.2000
The NZD/GBP cross rate dipped to 0.4300, over the last week, but appears to have stabilised around these low levels. The UK and NZ are both victims of the energy crises and are likely to fall into recession, as inflation takes a hold and drives substantial price rises. Fears over fuel shortages, will be joined by significant price rises in all goods and services, as inflation takes a hold in their respective economies.
Current Level: 0.4349
Support: 0.4200
Resistance: 0.4500
Last week's range: 0.4316-0.4361
Current Level: 2.2954
Support: 2.2800
Resistance: 2.3200
Last week's range: 2.2932-2.3162
The NZD/EUR cross has fallen to below 0.5000, over the last week, but is likely to remain relatively steady. Both the EUR and the NZD suffer the move towards the safety of US Dollar, in times of trouble. Inflation and recessionary pressures are ever growing realities in both Europe and NZ, which will only further depress both currencies.
Current Level: 0.4987
Support: 0.4900
Resistance: 0.5200
Last week's range: 0.4976-0.5048
Current Level: 2.0014
Support: 1.9700
Resistance: 2.2200
Last week's range: 1.9807-2.0095
The previously strong performance of the AUD has been largely forgotten, as global recession fears drive the demand for commodities lower. The impact on commodity Countries and their associated currencies has been dramatic. The AUD has crashed back towards 0.6800 and may well go even lower, despite attractive interest rate differentials. Australia and NZ remain extremely vulnerable to energy shortages, as the transition to green energy, has left them seriously exposed to supply constraints. Domestic generation and processing of energy, has been destroyed and both Countries, which rely almost completely on Asian imports.
Current Level: .6849
Support: .6700
Resistance: .7200
Last week's range: .6842 - .7017
The massive falls in the AUD has hit the AUD/GBP cross rate hard, which now trades as low as 0.5150. The spiralling inflationary pressures will drive the world into global recession, which will hit both currencies hard. The correction in the AUD has hit the cross rate, but with significant downside expected for both currencies, the cross may stabilise at these levels.
Current Level: 0.5194
Support: 0.5100
Resistance: 0.5300
Last week's range: 0.5156-0.5224
Current Level: 1.9246
Support: 1.9000
Resistance: 1.9700
Last week's range: 1.9139-1.9394
The AUD/EUR cross rate has now fallen below 0.6000, as commodity prices suffer the growing fears of a global recession. Europe is also vulnerable to the energy crises, as they were before the Middle east crises erupted. The longer the war continues the worse the situation becomes, with the ever-growing reality of a global recession, coming ever closer.
Current Level: 0.5976
Support: 0.5900
Resistance: 0.6200
Last week's range: 0.5954-0.6037
Current Level: 1.6728
Support: 1.6400
Resistance: 1.7000
Last week's range: 1.6562-1.6792
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