Global markets came into Thursday in a cautious tone as oil and US Bonds continue to surge on renewed US inflation risks. Risks are that pricing of monetary policy may need to remain higher for longer. The New Zealand Dollar (NZD) slipped to 0.5800 the figure against the US Dollar (USD) before reversing losses to clock 0.5890 early Friday. Earlier the RBNZ hiked interest rates from 2.5% to 2.75% sending the kiwi nearly 1 cent lower. Non- Farm Payroll releases tonight the major event risk ahead- we expect further volatility.
The current interbank midrate is: NZDUSD 0.5880
The interbank range this week has been: NZDUSD 0.5801- 0.5928
The New Zealand Dollar (NZD) extended losses against the Australian Dollar (AUD) in a surprise dovish release by the RBNZ Tuesday. The cross traded from (0.8250) 1.2120 reaching 0.8145 (1.2280) post release before settling around the 0.8170 (1.2240) area into Friday. Although the central bank commented they will need to most likely hike again to 3.0% the method will be less aggressive, gradual and cautious depending on incoming data. Its certainly becoming a fine line between upsetting a fragile local economic setting and offshore transport related inflation. The cross has pulled back off the long-term low at 0.8140 (1.2285) in the past few hours. A break past this point and we are into early 2013 prices.
The current interbank midrate is: NZDAUD 0.8167 AUDNZD 1.2235
The interbank range this week has been: NZDAUD 0.8140- 0.8267 AUDNZD 1.2095- 1.2285
We have seen massive swings in the New Zealand Dollar (NZD), British Pound (GBP) this week starting with Tuesdays’ RBNZ hike to interest rates. Prior to the RBNZ hiking from 2.5% to 2.75% prices were trading around 0.4365 (2.2915) before arriving at 0.4300 (2.3240) a classic “buy the rumour, sell the fact” knee jerk reaction. The RBNZ a little dovish in its review suggesting a “slow and cautious” approach with most of the recent rise to inflation (4.1) influenced by rising fuel costs. Personally, I would be surprised if the Reserve Bank hike again.
The current interbank midrate is: NZDGBP 0.4347 GBPNZD 2.3004
The interbank range this week has been: NZDGBP 0.4301- 0.4374 GBPNZD 2.2862- 2.3246
The New Zealand Dollar (NZD) retreated through key support at 0.5060 (1.9760) midweek against the Euro (EUR) to clock 0.5020 (1.9915) post the RBNZ interest rate release. With a combination of a dovish RBNZ and hawkish ECB this won’t be helping the kiwi. European officials are suggesting further rises to inflation, energy prices and interest rate hikes for the region.
The current interbank midrate is: NZDEUR 0.5056 EURNZD 1.9778
The interbank range this week has been: NZDEUR 0.5015- 0.5109 EURNZD 1.9573- 1.9938
Higher lows followed by higher highs in the Australian Dollar (AUD), US Dollar (USD) cross has been the theme over the week with a short trip to 0.7120 midweek before the Aussie stretching its legs out to 0.7200 to retest the long term high of mid-May 2026. Recent strength in metals and positive economic data along with expectations of the RBA rate hike later this month have all built a case for AUD support. China’s services PMI read came in 51.4 exceeding expectations creating a significant market reaction and AUD bids. Tonight’s risk event is monthly (NFP) Non-Farm Payrolls expected to come in with a modest improvement to jobs numbers.
The current interbank midrate is: AUDUSD 0.5880
The interbank range this week has been: AUDUSD 0.7120- 0.7205
The Australian Dollar (AUD) extended gains over the week against the British Pound (GBP) posting 0.5335 (1.8750) breaking past 0.5315 (1.8815) the 10-week high along the way early Friday. A risk on tone together with rises in precious metals and positive Chinese economic data have all helped support the AUD. Conversely the Bank of England (BoE) is expected to hold interest rates unchanged on the 17th of Sep. The next point of concern for the Pound is the area around 0.5340 (1.8730) a breakthrough this key zone and its thin air.
The current interbank midrate is: AUDGBP 0.5321 GBPAUD 1.8793
The interbank range this week has been: AUDGBP 0.5271- 0.5333 GBPAUD 1.8750- 1.8970
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