• Markets turned risk positive Monday on the news an interim peace agreement between the US and Iran had been made. Both parties have signed a Memorandum of Understanding (MOU) which should allow the immediate reopening of the Strait of Hormuz and the lifting of the US blockade on Iran. Details of the formal agreement should be put together within the next day or so.
• Crude Oil settled around 80.00 per barrel down from 86.00 levels. It’s interesting to remember the day the Iran/US war began prices were trading at 67.00. Any breakdown in the MOU agreement will quickly send prices higher as market again seeks a premium for oil.
• The Bank of Japan (BoJ) is expected to hike rates today to 1.0% from 0.75%. The central bank says the re-opening of the Strait may ease pressures for faster hikes, but the BoJ are still expecting 2 hikes in 2026.
• The Federal Reserve Bank (FED) are predicted to hold interest rates steady at 3.75% this week with the new fed chair Kevin Warsh to chair his first meeting.
• Today’s RBA policy announcement is not expected to throw up any surprises from the current interest rate of 4.35%.
• The New Zealand Dollar (NZD) has been the strongest performer over the past week on the main board while the Japanese Yen (JPY) has been the worst performer.
The New Zealand Dollar (NZD) pushed higher off the weekly open on the US/Iran headline to reach 0.5860 against the US Dollar (USD) before falling back early Tuesday to settle around 0.5820 levels. Markets have been feeling a lot better on the news that President Trump locked in a deal with Iran to re-open the Strait of Hormuz and end hostilities. The deal which is yet to be formally signed is encouraging but only if it lives up to the billing. This week’s focus will be on Thursdays Fed rate announcement with expectations the central bank will keep rates on hold at 3.75%. It will be the new chair Kevin Warsh’s first meeting; it will be interesting to see his views amid pressures to cut rates. A break of the low at 0.5800 and the kiwi could travel much lower.
Current Level: 0.5821
Support: 0.5800
Resistance: 0.5950
Last week's range: 0.5768-0.5846
The Australian Dollar (AUD) bounced higher off the open from 1.2075 (0.8280) to post 1.2145 (0.8235) into early Tuesday sessions. The New Zealand Dollar (NZD) has been one of the worst performers amid a fresh bout of “risk on” perhaps limited by upside moves due to a dovish RBNZ in comparison to the RBA. Today’s RBA cash rate announcement should give us some moves in the cross although the RBA is widely expected to hold at 4.35%. Rhetoric around whether further tightening is required via a hawkish hold- will be key to where the cross trades post the release.
Current Level: 0.8230
Support: 0.8140
Resistance: 0.8340
Last week's range: 0.8225-0.8300
Current Level: (1.2145)
Support: (1.1990)
Resistance: (1.2280)
Last week's range: (1.2050-1.2160)
UK CPI y/y prints Wednesday night before NZ GDP q/q Thursday morning holds our focus this week. A weakening New Zealand Dollar (NZD) Monday has prices trading around 0.4340 (2.3035) just off the long-term lows against the British Pound (GBP). Sticky UK inflation may continue to prop up the GBP for a while however we should get a good look at how the Bank of England (BoE) perceives economic signals when they meet Thursday night to review policy. No change from the 3.75% is expected however the member voting should tell a story. A retest at 0.4315 (2.3180) is our call this week.
Current Level: 0.4337
Support: 0.4315
Resistance: 0.4360
Last week's range: 0.4325-0.4373
Current Level: (2.3057)
Support: (2.2930
Resistance: (2.3180)
Last week's range: (2.2865-2.3121)
The New Zealand Dollar (NZD) has fallen away off the weekly open to post 0.5025 (1.9900) against the Euro (EUR) reversing late week gains from 0.5050 (1.9810). The EUR has been resilient of late given geopolitical risks have eased. NZ GDP q/q ending March should reflect growth of around 0.8%, anything higher could rally the kiwi and make the RBNZ rethink a repricing of hiking forecasts.
Current Level: 0.5019
Support: 0.5000
Resistance: 0.5050
Last week's range: 0.5007-0.5063
Current Level: (1.9924)
Support: (1.9800)
Resistance:(2.000)
Last week's range: (1.9751-1.9969)
Markets head into Tuesday with a positive risk tone with hopes of a deal between done between US and Iran, currently a peace deal and a reopening of the Strait of Hormuz is held up by a Memorandum of Understanding (MOU), we will know in the coming days if the deals sticks. The Australian Dollar (AUD) was supported by rise in equities to 0.7080 against the US Dollar (USD) where it settled around 0.7070. All eyes are on the RBA and Fed meetings this week with both expected to hold at 4.35% and 3.75%. Assessments of inflationary pressures will be closely watched for signals around possible policy tightening.
Current Level: 0.7071
Support: 0.7000
Resistance: 0.7250
Last week's range: 0.6978- 0.7081
The Australian Dollar (AUD) entered the week extending gains to 0.5280 (1.8950) against the British Pound (GBP) as risk markets improved off the back of a US/Iran deal being made. The US and Iran have made an interim peace deal to reopen the Strait of Hormuz. Leaders will meet this week In Pakistan to finalise the deal. The RBA meet later today when the central bank will hold their cash rate at 4.35%. The Bank of England (BoE) also meet Thursday night and will do the same- hold at 3.75%. UK CPI prints before the rate release and could dictate how the BoE approach future rate forecasts.
Current Level: 0.5270
Support: 0.5170
Resistance: 0.5310
Last week's range: 0.5230-0.5300
Current Level: (1.8975)
Support: (1.8830)
Resistance: (1.9350)
Last week's range: (1.8873-1.9121)
The Australian Dollar (AUD) stretched gains over the Euro (EUR) Monday reaching 0.6110 (1.6370) as markets turned “risk on” as an (MOU) Memorandum of Understanding agreement has been negotiated. The 14-point agreement should see the US and Iran extend the ceasefire by 2 months; details of the agreement will be formally signed this week when delegates meet in Pakistan. The RBA will leave their cash rate unchanged later today at 4.35%, we expect the RBA to be less hawkish in their statement.
Current Level: 0.6098
Support: 0.5975
Resistance: 0.6170
Last week's range: 0.6054-0.6133
Current Level: (1.6398)
Support: (1.6200)
Resistance: (1.6740)
Last week's range: (1.6303-1.6516)
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