• The greenback fell sharply against the main currency crosses Wednesday after the Democrats won congress. This looks to be a complete rejection of the current president who has lost control of the House of Representatives and the Senate.
• The AI investment bubble has come into question this week with Trump losing his power of congress. Every industry relating to AI has gone through a massive selloff with investors preferring to jump back into Bonds, Gold and the greenback. Memory and storage, Data Centres, Chip processors and Cloud data stocks have dropped 10-20%.
• Crude Oil is eased back from over 100.00 per barrel to trade back around 91.00 Friday. Gold has done the opposite and rallied over 3.0% to up over 4,100- the biggest daily gain since August.
• Reserve Bank of Australia (RBA) hiked interest rates midweek from 4.60% to 4.85% as widely expected. However, the vote wasn’t overly convincing in a 6-3 outcome. The news helped squeeze out a reasonable post announcement drop to 0.6950.
• Fed’s Nagel is leaning towards a hike at the December meeting with concerns a spill over from high energy prices to all economic sectors could last several months.
• The Bank of England (BoE) has hiked interest rates overnight to 4.0% in a 7-2 vote, the BoE suggesting a follow up hike in February could also be required.
• New Zealand Unemployment has edged higher in October rising to 5.70%- the highest level in over a decade.
• The British Pound (GBP) has been the strongest main board currency this week while the New Zealand Dollar (NZD) has been the worst performer.
The New Zealand Dollar (NZD) bounced off 0.5580 levels against the US Dollar (USD) as “risk markets” improved and punters sold the Greenback. US midterm elections have not gone the Presidents way losing the Senate and House as the Democrats romped in with majority voting. This has a catastrophic outcome for the Trump presidency halting his ability to advance his political agenda. NZ Unemployment rose to the highest level in a decade increasing to 5.7% in September. In overnight markets there has been a sharp selloff in AI related technology with indices all trading lower. The kiwi has retreated to 0.5600 levels this morning.
The current interbank midrate is: NZDUSD 0.5593
The interbank range this week has been: NZDUSD 0.5578- 0.5657
The Reserve Bank of Australia (RBA) raises interest rates 25 points to 4.85% as widely expected, the RBA vote shaped by a 6-3 split decision. The Australian Dollar (AUD) immediately falling away against the New Zealand Dollar (NZD) to 1.2390 (0.8070) before mildly recovering Thursday. NZ unemployment has published in September at 5.7% a decade high confirming the recent RBNZ hold at 2.75% was the right decision. The cross early Friday is trading around the 0.8065 (1.2400) area after the kiwi kicked on from 0.8025 (1.2460) Thursday.
The current interbank midrate is: NZDAUD 0.8070 AUDNZD 1.2380
The interbank range this week has been: NZDAUD 0.7986- 0.8080 AUDNZD 1.2375- 1.2521
The New Zealand Dollar (NZD) has been massacred over the past two weeks against the British Pound (GBP) falling from 0.4280 (2.3350) to 0.4161 (2.4030) as we head into Friday sessions. The Bank of England (BoE) hiked interest rates early this morning from 3.75% to 4.00% in a unanimous 9-love result, the first hike since the start of the Iran conflict. The central bank expects to also hike again in February next year as energy prices worsen which may keep the pressure on the kiwi heading into Xmas.
The current interbank midrate is: NZDGBP 0.4158 GBPNZD 2.4050
The interbank range this week has been: NZDGBP 0.4152- 0.4205 GBPNZD 2.3779- 2.4081
The Australian Dollar (AUD) has dipped below the key 0.7000 twice this week against the US Dollar (USD) falling sharply in NY trading from 0.7020 to post 0.6940 Friday. Markets turned from the good news coming from US mid term election results with the Democrats winning congress to a historic selloff in AI related technology taking which has taken risk products like the Aussie lower. Punters are starting to question the AI boom with new concerns over the change in the political landscape. Support sits at 0.6910.
The current interbank midrate is: AUDUSD 0.6927
The interbank range this week has been: AUDUSD 0.6923- 0.7033
Both the Reserve Bank of Australia (RBA) and Bank of England (BoE) raised interest rates this week but it’s the GBP which has come out on top. The RBA raised to 4.85% an 18 yeah high and the BoE raised to 4.0% in a 9-0 unanimous vote. The cross has extended last week’s move from 1.8870 (0.5300) to 1.9400 (0.5155) this morning, the biggest weekly move this year. We suspect the GBP could be in oversold territory as it approaches the 200-day moving average we could see a pullback.
The current interbank midrate is: AUDGBP 0.5150 GBPAUD 1.9417
The interbank range this week has been: AUDGBP 0.5149- 0.5254 GBPAUD 1.9031- 1.9421
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