We have no data publishing over the week in New Zealand; markets will be zoned in on the Federal Reserve when they meet Thursday morning. We are not expecting the Fed to move off 3.75%, however we do expect the central bank to stay hawkish reinforcing a higher for longer mantra with persistent on/off uncertainty in the Iran/US conflict. Prices in the New Zealand Dollar (NZD), US Dollar (USD) have settled around the 0.5780 mark early this week after retreating off 0.5870 figures early last week. As long as we see further easing in the Strait of Hormuz, we think the kiwi could gain bids this week.
Current Level: 0.5770
Support: 0.5700
Resistance: 0.5860
Last week's range: 0.5760- 0.5871
The Australian Dollar (AUD) rallied off the weekly open against the New Zealand Dollar (NZD) reaching 1.2100 (0.8265) levels early Tuesday retracing off 0.8375 (1.1940) mid last week. This marks a hard reversal for the kiwi after 5 relatively positive weeks, a little strange given the RBNZ extra hawkish stance on rate hikes. The RBA remains hawkish post last week’s jump in employment numbers confirming a higher for longer bias pushing back on easing expectations. Aussie CPI Wednesday should give us more of a clue with predictions- this should print at 4.0% unchanged from May. The next point of interest for the cross on the downside is 0.8230 (1.2150), a break past here and we could see 0.81’s again.
Current Level: 0.8257
Support: 0.8145
Resistance: 0.8375
Last week's range: 0.8274-0.8379
Current Level: (1.2101)
Support: (1.1940)
Resistance: (1.2280)
Last week's range: (1.1934-1.2086)
The New Zealand Dollar (NZD) consolidated Monday around 0.4350 (2.3000) levels against the British Pound (GBP) coming off 3 weeks of gains from 0.4250 (2.3530). Markets are expecting the Bank of England (BoE) to leave interest rates unchanged at 3.75% this week with some members expected to vote for a hike. With NZ inflation high and further hikes expected by the RBNZ we think the kiwi may retain the edge for a while longer with a retest of the area at 0.4365 (2.2900)
Current Level: 0.4341
Support: 0.4250
Resistance: 0.4370
Last week's range: 0.4328-0.4371
Current Level: (2.3036)
Support: (2.2880)
Resistance: (2.3520)
Last week's range: (2.2878-2.3105)
The New Zealand Dollar (NZD) reached a toppy long term high last week against the Euro (EUR) clocking 0.5145 (1.9440) a fresh 2026 high before reversing lower to post 0.5075 (1.9700) this morning. NZ CPI grew 1% y/y to 4.1% but was undermined by the ECB leaving their interest rate unchanged at 2.4% hinting at a September rate hike. Eurozone PMI’s have been strong particularly Germany returning to wider expansion in July reinforcing economic improvement. Technically we think price may target the zone around 0.5040 (1.9830) this week.
Current Level: 0.5074
Support: 0.4945
Resistance: 0.5140
Last week's range: 0.5069-0.5145
Current Level: (1.9708)
Support: (1.9460)
Resistance:(2.0230)
Last week's range: (1.9435-1.9725)
Recent Australian fundamentals have supported the Australian Dollar (AUD) of late against a resilient US Dollar (USD) backdrop. Stronger than anticipated data including a rise to June employed people and a firmer July PMI numbers. Expectations that the RBA will remain hawkish will be analysed Wednesday when CPI y/y is released. Markets are expecting a 4.0% read, the same as May but with Middle East energy supply disruptions this could rise. The Australian Dollar (AUD) holds just below 0.7000 in early Tuesday markets, needing to close above 0.7030 to consider fresh topside bias.
Current Level: 0.6988
Support: 0.6950
Resistance: 0.7070
Last week's range: 0.6959- 0.7026
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For the third week straight the British Pound (GBP) remains under pressure against the Australian Dollar (AUD) falling again off the weekly open at 0.5240 (1.9080) to 0.5260 (1.9010). Focus this week lies with Australian Inflation data and the Bank of England cash rate announcement. CPI is expected to remain at 4.0% y/y in June but with elevated energy and fuel prices a large chunk of the number we expect this to print higher. The RBA should maintain its hawkish bias. The BoE wont hike rates just yet off 3.75% but the vote won’t be unanimous with the economy also struggling with higher energy costs. On the chart we think price may retest the zone around 0.5320 (1.8800) from early June.
Current Level: 0.5255
Support: 0.5170
Resistance: 0.5320
Last week's range: 0.5185-0.5251
Current Level: (1.9029)
Support: (1.8800)
Resistance: (1.9350)
Last week's range: (1.9041-1.9285)
The Australian Dollar (AUD) is higher off the weekly open trading to 0.6145 (1.6270) this morning against the Euro (EUR) representing 5 weeks straight of gains from the prior low at 0.6020 (1.6615). Post last week’s hold at 2.4% the Eurozone confirmed they may need to hike at their September meeting if oil prices stay high effecting upside risks to inflation. Meanwhile we have Australian CPI printing tomorrow predicted to remain unchanged from 4.0%. Technically, a break past the 0.6210 (1.6100) level and we enter multi year highs.
Current Level: 0.6143
Support: 0.6070
Resistance: 0.6200
Last week's range: 0.6100-0.6150
Current Level: (1.6278)
Support: (1.6130)
Resistance: (1.6480)
Last week's range: (1.6258-1.6393)
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