• The Iran conflict has reignited after several days of relative peace; both the US and Iran have attacked putting markets back into volatility and uncertainty.
• Fed’s Warsh increases rate hike chances based on inflation targets.
• Trump early week rant on socials: Iran has no Navy and Air Force, and the country is a failed nation.
• Oil prices are up sharply overnight to 86.00 off 76.00 despite the US and Venezuela announcing Friday Trump calling a “historic” oil agreement giving the US majority stakes in development of a large group of Venezuelan oil fields.
• The Canadian Dollar (CAD) could fall further on tariff woes and a dovish Bank of Canada.
• The strongest main board currency last week was the US Dollar (USD) while the worst performing currency was the New Zealand Dollar (NZD) falling around 1.0%
The New Zealand Dollar (NZD) pulled back off 0.5920 Monday to post modest losses into Tuesday sessions amid fresh uncertainty in the conflict between Iran and USA. This comes off the back off heavy declines late last week from 0.5970 levels. This week’s Reserve Bank of New Zealand (RBNZ) rate announcement is the key release with predictions the central bank will hike a further 25 points to 2.75% the second straight rise after the RBNZ hiked on 8th July. We believe this is not the correct move with so many struggling in a cost-of-living crisis. However, predictions are for the RBNZ to be at 3.0% at year end and remain here through 2027. We think the kiwi should pick up bids towards 0.6000 this week.
Current Level: 0.5916
Support: 0.5900
Resistance: 0.6000
Last week's range: 0.5904- 0.5982
The Australian Dollar (AUD) pushed higher off Monday’s open to clock 1.2132 (0.8242) against the New Zealand Dollar (NZD) making a new 2 month high. Prices have settled this morning around the 0.8265 (1.2100) region as we wait for tomorrow’s data. Australian GDP is first with no change expected in the second quarter (0.3%) before the key Reserve Bank of New Zealand rate announcement. Markets see chances at 80% the RBNZ will hike the interest rate from 2.5% to 2.75%. Personally, I would like to see a hold given stagnation possibility in the NZ economy developing. We don’t see a flood of AUD buyers entering the market this week and predict prices to reach the 0.8300 (1.2050) zone.
Current Level: 0.8252
Support: 0.8165
Resistance: 0.8290
Last week's range: 0.8250-0.8348
Current Level: (1.2109)
Support: (1.2060)
Resistance: (1.2250)
Last week's range: (1.1978-1.2120)
A reversal off last week’s 0.4385 (2.2800) high in the British Pound (GBP), New Zealand Dollar (NZD) looks to give the Pound an early week edge in uncertain market conditions, trading to 0.4365 (2.2900) in early Tuesday. Risk markets have taken to the safe haven GBP ahead of the NZD as another flare up in the Strait of Hormuz threatens to derail recent upside moves made by the kiwi. The RBNZ meet Wednesday and should hike interest rates to 2.75% which could put the kiwi in a bid mood post the release.
Current Level: 0.4367
Support: 0.4310
Resistance: 0.4385
Last week's range: 0.4361-0.4389
Current Level: (2.2899)
Support: (2.2800)
Resistance: (2.3200)
Last week's range: (2.2782-2.2926)
The New Zealand Dollar (NZD) extended declines Monday against the Euro (EUR) coming off last week’s July high at 0.5120 (1.9520) to clock 0.5090 (1.9640) this morning as markets turns “risk off”. A hawkish ECB won’t be helping the kiwi with officials suggesting further rises to inflation and hence energy prices. Comments from Schnabel have reinforced expectations of a September rate hike. Closer to home is tomorrow’s RBNZ meeting with expectations of a hike from 2.5% to 2.75%.
Current Level: 0.5092
Support: 0.5075
Resistance: 0.5120
Last week's range: 0.5095-0.5122
Current Level: (1.9638)
Support: (1.9530)
Resistance:(1.9700)
Last week's range: (1.9521-1.9628)
The bull channel we have been watching on the chart in the Australian Dollar (AUD), US Dollar (USD) pair is firmly in play with the AUD posting fresh highs late last week at 0.7195 marking a new 12 week high in the cross. With higher lows and higher highs since June’s 0.6860 area the AUD now targets the high at 0.720 the multi-year high. US Non-Farm Payroll prints Friday and should show a rise to jobs numbers.
Current Level: 0.7166
Support: 0.7120
Resistance: 0.7200
Last week's range: 0.7136- 0.7207
The British Pound (GBP) lost ground last week taking on losses from 0.5235 (1.9100) levels to this morning’s 0.5290 (1.8900) zone. Sterling may draw support from the UK govt renewed emphasis on fiscal tax ahead of the UK October budget in the near term. The diverging monetary policy between the RBA and BoE should keep the Aussie on the front foot especially with a positive Australian economic outlook. A retest of the 0.5320 (1.8800) area looks favourable.
Current Level: 0.5290
Support: 0.5235
Resistance: 0.5320
Last week's range: 0.5237-0.5303
Current Level: (1.8903)
Support: (1.8800)
Resistance: (1.9100)
Last week's range: (1.8854-1.9094)
The Australian Dollar (AUD) has extended moves higher against the Euro (EUR) into the weekly close coming off 20 August prices at 0.6080 (1.6440) to post 0.6190 (1.6160). Monday’s action has been a risk off tone across markets with the conflict in the Strait of Hormuz flaring up again with missiles fired from both Iran and US military. It’s a light data calendar this week in the cross with just Australian GDP q/q publishing. Price may retest the zone around 0.6150 (1.6260) over the week.
Current Level: 0.6168
Support: 0.6100
Resistance: 0.6200
Last week's range: 0.6125-0.6186
Current Level: (1.6212)
Support: (1.6130)
Resistance: (1.6400)
Last week's range: (1.6165-1.6331)
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