• The strait of Hormuz is closed again Monday with disputes over Iranian nuclear capability and sanctions relief remaining unresolved. It's clear risks to markets are high with energy prices again rising. Crude back up around 90.00 per barrel.
• The blockade in the strait of Hormuz on Iran vessels is still in place, but Trump is considering lifting this in order conduct peace talks with Iran in Islamabad. However, Iran officials deny any intention to participate in these such talks. Certainly, after an Iranian vessel seizure overnight this may sink hopes of any peace deal. Trump declaring overnight “I’m winning the war by a lot”.
• This week’s NZ CPI q/q should come in benign around 0.8% taking inflation to 3.1% y/y. The Middle East conflict’s energy fallout wont fully be known until we see second quarter data which publishes on 21st July.
• The Australian Dollar (AUD) has been the strongest currency in the past week while the Euro (EUR) has been the worst performer.
Markets Monday are very much in a wait and see mode with the US Dollar (USD) trading lower overnight, the New Zealand Dollar (NZD) collecting gains to 0.5900 levels. Geopolitical tensions in the Strait of Hormuz remain with reports Trump could lift the blockade in place to enter into peace talks. This week’s main economic data comes in the form of NZ quarterly inflation data with expectations of a rise to 3.1% y/y ending March. This just maybe could send the kiwi higher towards last week’s high at 0.5920.
Current Level: 0.5905
Support: 0.5840
Resistance: 0.6000
Last week's range: 0.5789- 0.5928
The Australian Dollar (AUD remains well supported on dips. In new just out, NZ inflation for the first quarter has come in at 0.9% ahead of the forecasted 0.8% sending the New Zealand Dollar (NZD) higher from 0.8210 (1.2180) to 0.8240 (1.2140). Despite the surge higher we still expect the long-term bear trend to extend lower in big picture themes. The major trendline should hold with upside moves limited to 0.8260 (1.2110). Australian CPI data is next week with the first quarter figure expected to be around 4.5% off 3.7%.
Current Level: 0.8225
Support: 0.8200
Resistance: 0.8250
Last week's range: 0.8202-8304
Current Level: 1.2145
Support: 1.2120
Resistance: 1.2200
Last week's range: 1.2041-1.2191
Despite markets operating mainly in a risk off tone over the past fortnight the New Zealand Dollar (NZD) has outperformed the British Pound (GBP) with the kiwi reversing off 0.4300 (2.3250) to trade back at 0.4355 (2.2970) this morning. With the RBNZ monetary backdrop supporting hikes as soon as mid-year with the central bank turning hawkish lately this has bought back buyers of NZD. This week’s UK CPI q/q printing Wednesday should support further upside pressures.
Current Level: 0.4362
Support: 0.4325
Resistance: 0.4370
Last week's range: 0.4328-0.4367
Current Level: 2.2925
Support: 2.3120
Resistance: 2.3120
Last week's range: 2.2895-2.3102
The New Zealand Dollar (NZD), Euro (EUR) cross has traded sideways over the past week with moves around 0.5000 (2.000) seen. It’s tough to get a ‘steer’ in this cross with so much geopolitical uncertainty at the moment. Middle East tensions and higher oil prices is hurting the eurozone energy importing region. Also, of note the ECB monetary policy tone is cautious around a gradual easing (cuts) plan. ECB Manufacturing data prints Thursday morning and should show mixed results.
Current Level: 0.45011
Support: 0.4940
Resistance: 0.5020
Last week's range: 0.4967-0.5015
Current Level: 1.9956
Support: 1.9920
Resistance: 2.0230
Last week's range: 1.9939-2.0130
The Australian Dollar (AUD) has held up well Monday reaching 0.7180 this morning marking the highest daily close since June 2022. Tensions remain in the strait of Hormuz with an Iranian vessel seizure overnight which could ultimately derail potential peace talks in Islamabad. Expectations around Fed tightening have lifted with markets now expecting a cut later in the year. At the same time the RBA hawkish tone seems to underpin AUD support.
Current Level: 0.7174
Support: 0.7120
Resistance: 0.7300
Last week's range: 0.6986- 0.7220
We have seen upside moves by the Australian Dollar (AUD) despite renewed uncertain footings in the Iran/US war. Overnight the AUD moved off 0.5280 (1.8930) to trade around 0.5305 (1.8850) in late NY as the currency looks to retest the long term high at 0.5340 (1.8740) against the British Pound (GBP). CPI in the UK Wednesday should show a rise to 3.3% y/y ending March with predictions of the number accelerating over the coming months with rises to energy costs. We may see a reversal towards 0.5300 (1.8890) briefly midweek.
Current Level: 0.5300
Support: 0.5235
Resistance: 0.5340
Last week's range: 0.5227-0.5317
Current Level: 1.8867
Support: 1.8740
Resistance: 1.9100
Last week's range: 1.8806-1.9130
The Australian Dollar (AUD) has continued to track higher off the weekly open trading to 0.6090 (1.6415) this morning arriving at 5-week highs. The absence of ECB data and higher energy prices is affecting the region economically not to mention a subdued tone from the central bank is all weighing on the currency. A close above 0.6105 (1.6380) could signal an extension of the long-term bull trend towards the key 0.6190 (1.6160) area- the December 24 high.
Current Level: 0.6088
Support: 0.6000
Resistance: 0.6120
Last week's range: 0.6010-0.6100
Current Level: 1.6425
Support: 1.6340
Resistance: 1.6660
Last week's range: 1.6394-1.6637
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