• Global markets started the week in a heavy “risk off” mood mainly due to the ongoing uncertainty brewing in the Strait of Hormuz. Fresh attacks on shipping are having a sensitive effect on the price of oil but more importantly are escalating long term effects on tanker traffic.
• Anthropic, OpenAI and Google have held chats around the safety of AGI, trying to formulate an industry standard safety body. Meanwhile Trump said AI will be the greatest economic development engine in history” pushing back on any AI regulation.
• Oil prices hold 101.00 per barrel at the Tuesday NY close.
• The European Central Bank (ECB) have increased interest rates to 2.50%. Lagarde saying price stability is important in an unpredictable market. The conflict in the Middle East has pushed up energy prices further and likely to affect headline inflation into the first half of 2027. Further tightening remains on the table.
• The strongest main board currency last week has been the Japanese Yen (JPY) while the worst performing currency was the Canadian Dollar (CAD).
The New Zealand Dollar (NZD) extended last week’s decline from 0.5880 clocking 0.5757 this morning a fresh 10 week low against the US Dollar (USD). Geopolitical woes in the Middle East have markets on high alert as oil prices rise inflating CPI concerns supporting the greenback and bond yields. Federal Reserve Funds Rate prints Thursday morning and will almost certainly hike rates to 4.0% in order to tackle persistently high inflation. Topside moves by the NZD could be well capped over the remainder of the week.
Current Level: 0.5757
Support: 0.5740
Resistance: 0.5850
Last week's range: 0.5788- 0.5888
Mid last week’s push past prior lows at 0.8145 (1.2280) cemented further declines by the New Zealand Dollar (NZD) posting a fresh low of 0.8090 (1.2360) against the Australian Dollar (AUD) Monday. Momentum is certainly all with the Aussie as we head into a thin week of economic releases. Hawkish RBA rate rise expectations next week after data confirmed persistent inflation upside has given the AUD bullish continuation of late. Data this week lies with NZ GDP q/q with markets predicting a print barely positive of 0.1% for the second quarter.
Current Level: 0.8073
Support: 0.8000
Resistance: 0.8620
Last week's range: 0.8085-0.8465
Current Level: (1.2380)
Support: (1.1600)
Resistance: (1.2500)
Last week's range: (1.2245-1.2368)
The New Zealand Dollar (NZD) continues to be massacred by the British Pound (GBP) of late with the cross posting 0.4275 (2.3390) this morning the lowest level seen since the first week of July 2026. The Bank of England (BoE) confirming they will continue to tighten policy through to the end of the year clearly giving the Pound a boost. We will get a clear picture tomorrow when UK CPI y/y releases (2.9% forecast 3.1%). Meanwhile, with market sentiment very risk off currently this will also be offering easy momentum for the GBP.
Current Level: 0.4268
Support: 0.4250
Resistance: 0.4310
Last week's range: 0.4289-0.4354
Current Level: (2.3430)
Support: (2.3200)
Resistance: (2.3530)
Last week's range: (2.2966-2.3314)
Central bank divergence looks be playing a major part In the New Zealand Dollar (NZD) underperforming in the past three weeks ever since the 2nd Sep rate hike and rhetoric. The Euro (EUR) has taken back 2 months of declines to 0.5000 (2.000) the July low. The ECB raised to 2.65% last week with further hawkish banter of further hikes to come. Lagarde speaks Friday in Dublin.
Current Level: 0.4988 (2.0048)
Support: 0.4945 (2.000)
Resistance: 0.5000 (2.0220)
Last week's range: 0.4990- 0.5067 (1.9735- 2.0038)
Current Level: 0.5058
Support: 0.5050
Resistance: 0.5120
Last week's range: 0.5015-0.5110
Current Level: (1.9770)
Support: (1.9520)
Resistance:(1.9800)
Last week's range: (1.9571-1.9938)
The Australian Dollar (AUD) dropped away Monday on the open extending Friday’s decline to 0.7100 as the “risk off’ mood drove crosses lower against the US Dollar (USD). A small recovery is in play however which is encouraging for buyers with price back around 0.7140 as oil moves lower off its highs. Still work to be done to regain topside momentum especially with the FOMC this Thursday expected to raise interest rates from 3.75% to 4.0%. We doubt the AUD will retest prior highs this week.
Current Level: 0.7128
Support: 0.7120
Resistance: 0.7240
Last week's range: 0.7149- 0.7237
The last two weeks on gains made by the Australian Dollar (AUD) against the British Pound (GBP) have been erased with price pushing back off 0.5340 (1.8730) to trade around 0.5280 (1.8950) this morning. The Bank of England (BoE) are expected to leave rates unchanged when they meet tomorrow at 3.75% in a unanimous vote but before then we have inflation to print which should rise off the July 2.9% print die to rising energy costs. With uncertainty in the Strait of Hormuz rearing its head again we can expect markets to remain risk averse.
Current Level: 0.5284
Support: 0.5235
Resistance: 0.5335
Last week's range: 0.5296-0.5339
Current Level: (1.9055)
Support: (1.8740)
Resistance: (1.9100)
Last week's range: (1.8730-1.8879)
Since the ECB raised interest rates last week from 2.40% to 2.65% the Australian Dollar (AUD) has lost momentum off 0.6220 (1.6080) levels, the new 2-year highs backtracking to 0.6160 (1.6230) this morning. The ECB’s quarter percent rise came with a moderately hawkish tone with markets expecting further tightening particularly after recent inflation forecasts suggest it may remain above target for longer. It’s too early to call a structural shift change, so we think the cross remains bearish.
Current Level: 0.6178
Support: 0.6150
Resistance: 0.6218
Last week's range: 0.6162-0.6219
Current Level: (1.6186)
Support: (1.6080)
Resistance: (1.6260)
Last week's range: (1.6079-1.6226)
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