• Global markets head into Friday cautiously as escalating Middle East tensions drive oil prices higher.
• Markets eye key US inflation data which has the capacity to be a market “repricing” event for the Federal Reserve.
• Equities and commodities dive lower as “risk” mood deteriorates.
• Oil prices have gone higher in the NY session reaching 103.00 per barrel.
• Trump made comment yesterday that he thought the war in the Middle East would end by midterms, this could prompt the US President to go back to the negotiating table.
• The European Central Bank (ECB) have increased interest rates by 0.25% overnight to 2.50% as widely predicted. 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
• The strongest main board currency this week has been the Japanese Yen (JPY) while the worst performing currency has been the New Zealand Dollar (NZD) falling around 0.5% against the crosses.
Oil anxiety continues to cause grief in markets overnight rising to 103.00 a barrel. Escalating tensions in the Middle East are rapidly repricing inflation expectations across the globe. The New Zealand Dollar (NZD) sank to 0.5790 from Thursday’s 0.5850 posting a new 7 week low against the US Dollar (USD). Both commodity and equity markets are down not helping topside moves in the cross. Strong US Unemployment data has revived prospects of a Fed interest rate rise next week. The kiwi should show good resilience if it retests the 0.5760 area.
The current interbank midrate is: NZDUSD 0.5806
The interbank range this week has been: NZDUSD 0.5788- 0.5888
The New Zealand Dollar (NZD), Australian Dollar (AUD) cross settled around 0.8103 (1.2340) levels this morning after reaching 0.8085 (1.2370) earlier in the week the May 2012 low. Momentum is such that its possible the pair could retest the 0.8000 (1.2500) big figure support in the coming days with fundamentals favouring further AUD bull continuation. Next weeks incoming data, NZ quarterly GDP is expected to print at 0.8% the same as first quarter.
The current interbank midrate is: NZDAUD 0.8112 AUDNZD 1.2330
The interbank range this week has been: NZDAUD 0.8084- 0.8169 AUDNZD 1.2240- 1.2369
The New Zealand Dollar (NZD) has suffered a massive week of losses against the British Pound (GBP) starting the week out at 0.4350 (2.2980) and reaching 0.4290 (2.3310) in morning trade, the fall making a new 10 week low. With a mix of a “risk off” tone and firming Bank of England (BoE) tightening later this year the GBP has and could still be well supported for a while. Meanwhile UK housing data also offered GBP encouragement. UK GDP m/m prints tonight.
The current interbank midrate is: NZDGBP 0.4297 GBPNZD 2.3272
The interbank range this week has been: NZDGBP 0.4289- 0.4353 GBPNZD 2.2971- 2.3315
The Australian Dollar (AUD) has pivoted hard off 0.7215 in NY session to clock 0.7155 at the close and retest the bottom of the long-term bull channel. I wouldn’t call it a change in momentum just yet and a structural change but a pull back in a bull market. Having said this, part of the overnight falls has been based on repricing of a Fed rate rise at next week’s meeting with strong prospects of a hike to 4.0%, midweek jobs data certainly supports this. Focus is now firmly on tonight’s US inflation data y/y and will set the tone for next week. Underlying support for RBA rate hikes should keep the AUD buoyant.
The current interbank midrate is: AUDUSD 0.7160
The interbank range this week has been: AUDUSD 0.7152- 0.7236
Last week’s moves higher by the Australian Dollar (AUD) have been erased by the British Pound (GBP) over the week with the cross coming off early levels at 0.5340 (1.8730) to post 0.5300 (1.8880) into the early morning NY close. Although the Reserve Bank of Australia (RBA) remain hawkish on policy markets have been extremely “risk off” over the week based on escalations in the Strait of Hormuz. Also making advances difficult for the AUD is firmer expectations of the Bank of England (BoE) raising interest rates later in 2026. Certainly, if CPI in the UK publishes hot next Wednesday, this could force the central bank’s hand early.
The current interbank midrate is: AUDGBP 0.5297 GBPAUD 1.8878
The interbank range this week has been: AUDGBP 0.5296- 0.5338 GBPAUD 1.8731- 1.8879
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