• US equity indices strengthened 1-2% to start the month of August.
• Talks between Iran and Trump are still ongoing with Trump saying, “the conflict is working out very well, this is the last chance” (again)
• The Federal Reserve left rates unchanged at 3.75% late last week. The new Fed chair Warsh is clearly moving the central bank away from the old school transparency of frequently signalling their thoughts on policy to a philosophy around placing the reasonability back on markets providing insights via data releases, the fed doesn’t then need to constantly be telling the markets what its thinking. Under this previous framework, too much information can muddy the waters and confuse markets and increase volatility.
• Odds of an extra hike by the RBNZ rose last week post NZ y/y inflation read. It’s possible we may see another rate rise at the September meeting as well as either the late Oct or December meetings.
• The Bank of Japan (BoJ) held interest rates at 1.0% Friday as expected. The Bank of Japan and the Federal Reserve have jointly intervened to support the Yen by buying the JPY and selling the USD after it posted a multi decade low of 164.00. We may see further intervention this week to strengthen the Yen further off current 157.00 levels
• The strongest main board currency last week was the Japanese Yen (JPY) while the worst performing currency was the US Dollar (USD).
US Federal Funds Rate Friday came in with a “hold” at 3.75% as markets were expecting following a 9-3 vote. Inflation remains elevated mainly based on supply shocks to energy sectors, the central bank saying economic growth remains stable and job numbers have kept pace with the workforce. The New Zealand Dollar (NZD) retraced off 0.5908 early Monday to pull back towards 0.5860 levels heading into Tuesday. We see strong technical support around 0.5860 which could underpin further downside moves. On the economic docket this week is NZ jobs numbers with a prediction we could see a rise to unemployment before US Non-Farm Payroll Friday.
Current Level: 0.5865
Support: 0.5840
Resistance: 0.6000
Last week's range: 0.5761- 0.5887
Equity markets have been buoyant with tensions in the Middle East easing, Trump saying he was still in talks with Iran officials. Meanwhile, Iran warns of serious casualty risks to US forces if the blockade in the Strait of Hormuz continues. Rezaei an Iranian senior advisor warned that Iran would not tolerate the situation as it was and ruled out a second corridor opening up. The New Zealand Dollar (NZD) has pulled off a clear-cut break above key resistance at 0.8375 (1.1940) Monday to post 0.8390 (1.1920) mid-morning against the Australian Dollar (AUD) marking an early March 22 week high.
Current Level: 0.8377
Support: 0.8145
Resistance: 0.8400
Last week's range: 0.8250-0.8375
Current Level: (1.1931)
Support: (1.1900)
Resistance: (1.2280)
Last week's range: (1.1939-1.2120)
The New Zealand Dollar (NZD) continues to improve against the British Pound (GBP) reaching last week’s high at 0.4375 (2.2860) in morning trade. A daily close above 0.4380 (2.2840) could signal further upside for the kiwi and bullish continuation, its clear skies through to 0.4445 (2.2500) levels of late May. Recent NZ positive manufacturing and a hawkish RBNZ have contributed to recent moves amid a more “risk on” tone. NZ unemployment prints this week and should read at 5.4% for July slightly up on June’s 5.3%.
Current Level: 0.4368
Support: 0.4335
Resistance: 0.4375
Last week's range: 0.42335-0.4375 (2.2853-2.3066)
Current Level: (2.3501)
Support: (2.3170)
Resistance: (2.31550)
Last week's range: (2.3314-2.3490)
Heavy risk on market tone bought the New Zealand Dollar (NZD) back from 0.5055 (1.9790) against the Euro (EUR) Friday to close the week circa 0.5110 (1.9580). Into Tuesday the kiwi is slightly down around 0.5100 (1.9600) as price looks for directional cues. The Eurozone economy expanded 0.4% in Q2 of 2026 ticking above expectations of 0.2% marking the biggest rise in growth since first quarter 2025. Meanwhile NZ unemployment is predicted to rise in July to 5.4% from 5.3%, if this happens it will certainly confirm the RBNZ hawkish mantra.
Current Level: 0.5096
Support: 0.5050
Resistance: 0.5105
Last week's range: 0.5050-0.5115
Current Level: (1.9623)
Support: (1.9530)
Resistance:(1.9800)
Last week's range: (1.9545-1.9795)
We saw thin liquidity yesterday in Australian Dollar (AUD), US Dollar (USD) cross with an Australian holiday and some banks closed causing disruption. The Aussie hasn’t been able to hold Fridays highs around 0.7040 dropping below key support at 0.7000 to trade back around 0.6980 levels. Markets remain focused on the Iran/US developments, Trump saying talks are ongoing. Key data this week comes in the form of US Non-Farm Payroll and unemployment with both expected to come in steady. On the chart we see higher lows followed by higher highs suggesting a bull trend is in play and a possible retest of the 100-day moving average at 0.7050
Current Level: 0.7001
Support: 0.6920
Resistance: 0.7070
Last week's range: 0.6922- 0.7043
Prices in the British Pound (GBP), Australian Dollar (AUD) have extended Fridays levels around 0.5235 (1.9100) to clock 0.5195 (1.9250) Monday with markets turning “risk off”. The Aussie has since improved in early Tuesday. The Bank of England (BoE) inflation forecast is expected to be around 3.0% in the second half of the year well ahead of the 4% threshold so the measure of a hike in September will be largely based on energy price factors. No tier 1 data publishing in this cross this week. Moves will be largely geopolitically driven.
Current Level: 0.5213
Support: 0.5175
Resistance: 0.5365
Last week's range: 0.5200-0.5265
Current Level: (1.9182)
Support: (1.9000)
Resistance: (1.9330)
Last week's range: (1.8996-1.9225)
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.The Euro (EUR) has put in a nice recovery last week breaking downside momentum to breakout through the 1.6320 (0.6130) area against the Australian Dollar (AUD) to clock 1.6495 (0.6060). Early Tuesday sessions suggest the Euro wants to retest the 1.6500 (0.6060) zone, with the ECB mildly hawkish we could see bullish continuation this week develop. The cross has no significant data releasing over the week through to next week’s RBA Cash Rate announcement.
Current Level: 0.6081
Support: 0.6030
Resistance: 0.6155
Last week's range: 0.6062-0.6153
Current Level: (1.6444)
Support: (1.6250)
Resistance: (0.6155)
Last week's range: (1.6251-1.6496)
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