Markets opened risk averse Monday gapping the New Zealand Dollar (NZD) to 0.5790 levels against the US Dollar (USD) as weekend negotiations between the US and Iran collapsed. Ongoing risks around the strait of Hormuz have lifted energy prices again. Late Monday's mood was replaced by positivity as the war moves closer to a conclusion after Vance talks with Tehran. The gist of an agreement seems to be focused on a non-nuclear Iran in exchange for sanctions relief and funds. Meanwhile, US Authorities are holding onto the transitory rhetoric with inflation in March rising to 3.3% late last week slightly lower than the 3.4% expected but considerably higher than Februarys 2.6% y/y. They argue once energy prices are stripped out of the data the figure equates to a modest rise. A daily close above 0.5870 could signal further upside moves.
Current Level: 0.5872
Support: 0.5680
Resistance: 0.6000
Last week's range: 0.5680- 0.5872
The New Zealand Dollar (NZD), Australian Dollar (AUD) remains at long term lows around 0.8265 (1.2100) into Tuesday sessions after bouncing back off 0.8200 (1.2200) mid last week on improved risk. Direction in the cross is still to the downside with pressures stalling in the run up to 0.8375 (1.1940) two weeks back. Data this week comes in the form of Australian Unemployment data with the jobless number expected to remain at 4.3%. We predict a retest of the low at 0.8220 (1.2160) this week.
Current Level: 0.8268
Support: 0.8195
Resistance: 0.8375
Last week's range: 0.8198-0.8301
Current Level: 1.2084
Support: 1.1940
Resistance: 1.2200
Last week's range: 1.2046-1.2198
The New Zealand Dollar (NZD) softened Friday to 0.4330 (2.3100) against the British Pound (GBP) off the back of ongoing political tensions in the middle east and risk around the strait of Hormuz. Mood overnight however improved with talks in play suggesting Iran would like to “make a deal”. This hinges on Iran agreeing to not hold nuclear weapons. We have no data of note on the economic docket this week. RBNZ governor Breman speaks Thursday morning.
Current Level: 0.4343
Support: 0.4310
Resistance: 0.4370
Last week's range: 0.4301-0.4368
Current Level: 2.3025
Support: 2.2870
Resistance: 2.3190
Last week's range: 2.2893-2.3250
The Euro (EUR) came under pressure late last week against the New Zealand Dollar (NZD) pulling back from 0.4930 (2.0280) to clock 0.5020 (1.9935) just prior to the weekly close. Into Tuesday the cross is pivoting around the key 0.5000 (2.000) level with political tensions improving over the past few hours. The disruption in the Strait of Hormuz has elevated crude prices and raised upside risks to European inflation as much of the oil shipped through the strait ends up fuelling aircraft and vehicles. We expect the EUR to remain well supported on dips.
Current Level: 0.4990
Support: 0.4945
Resistance: 0.5000
Last week's range: 0.4923-0.5016
Current Level: 2.0040
Support: 2.000
Resistance: 2.0230
Last week's range: 1.9935-2.0312
Market sentiment in the Iran conflict has improved over the past 24 hours or so with markets changing to a “risk on” tone as a potential deal being done. The Australian Dollar (AUD) pushed off 0.6980 levels to trade back around 0.7100 areas this morning. If we see markets remain positive the next target to the topside is 0.7150 the mid-March high. Earlier US CPI y/y published at 3.3% below expectations of 3.4% but much higher than the Februarys 2.4%. The fed is still suggesting this is a blip in the down trend once oil prices soften. We are not so sure.
Current Level: 0.7099
Support: 0.6840
Resistance: 0.7150
Last week's range: 0.6875- 0.7094
Monday's risk off trip to 0.5230 (1.9130) didn't hold in the British Pound (GBP), Australian Dollar (AUD) pair with prices supporting the Aussie with fresh risk on sentiment reversing losses back to 0.5255 (1.9030) into Tuesday. Geopolitical tensions eased overnight with talks between the US and Iran booting risk products. The next round of talks has been scheduled for Thursday in Islamabad with the US expecting to get across the line on nuclear material in exchange for sanctions relief.
Current Level: 0.5252
Support: 0.5170
Resistance: 0.5340
Last week's range: 0.5217-0.5286
Current Level: 1.9040
Support: 1.8740
Resistance: 1.9350
Last week's range: 1.8916-1.9166
The latest ECB inflation projections highlight a rise to 2026 CPI due to increased energy costs and downwardly revised growth forecasts. This may bring about central bank talks of rate hikes mid to late in 2026. Currently markets have no expectations the ECB are committed to hikes this year, but we sense this is changing fast. As divergence between the two central banks shortens, we expect the EUR to recapture bids targeting 0.5940 (1.6840) medium term.
Current Level: 0.6033
Support: 0.5970
Resistance: 0.6190
Last week's range: 0.5975-0.6061
Current Level: 1.6575
Support: 1.6160
Resistance: 1.6750
Last week's range: 1.6497-1.6736
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