• Iran and the US both reject deal – no “final deal” has been reached yet.
• Iran have targeted 4 American ships attempting to pass through the strait of Hormuz, Iran media report a US aircraft has been destroyed. What a strange Ceasefire this is.• US Major Equity indices close at record highs. The NASDAQ closed at 26917 and the S&P 7563.
• Improved risk sentiment has seen the Australian Dollar (AUD) and New Zealand (NZD) Dollar move higher.• NZ Consumer Confidence rose 6 points in May to 86.5 but remains well below anything viewed as positive, 21 points below January levels.
• ECB’s Stournaras confirms the most likely outcome at the June ECB meeting is a rate hike- 95% priced in.
• The New Zealand Dollar (NZD) has been the strongest performer this week on the main board while the Japanese Yen (JPY) has been the worst performer.
The New Zealand Dollar (NZD) improved from midweek numbers around 0.5825 to clock 0.5935 this morning against the US Dollar (USD) as risk sentiment improved yesterday with talks of a deal being close suggesting the US and Iran were closing in on an understanding on a ceasefire. Crude oil traded lower to 88.00 per barrel and US yields moved lower. Earlier in the week the NZ Budget provided mild support for the kiwi based more on being fiscally positive rather than stimulatory. Nicola Willis has eyed a surplus on the horizon in the 2028-2029 year, a year ahead of schedule but said there would be no lolly scramble. Health was the big winner with 5.8B of new spending. A push through key 0.6000 could signal further upside for the NZD.
The current interbank midrate is:NZDUSD 0.5942
The interbank range this week has been:NZDUSD 0.5827- 0.5945
This week’s action in the New Zealand Dollar (NZD), Australian Dollar (AUD) has seen a massive shift higher for the kiwi- breaking through the upside of the bear trend which has been in place since the beginning of 2026. The kiwi’s easiest best week rising from 0.8145 (1.2280) to 0.8290 (1.2065) where it sits as I write. The divergence we have seen for months between the RBNZ and RBA looks to have closed in with the Reserve Bank of Australia nearing the top end of their tightening policy while the Reserve Bank of New Zealand has become more hawkish on rate hikes. A repricing of future rate expectations is clearly evident, perhaps we have seen the last of the lows circa 0.8140 (1.2280) in the cross for this cycle. Certainly, those looking at selling AUD should consider these levels which still represent extremely good historical lows.
The current interbank midrate is: NZDAUD 0.8292AUDNZD 1.2051
The interbank range this week has been: NZDAUD 0.8141- 0.8299AUDNZD 1.2049- 1.2283
The past 2 days of trading in the British Pound (GBP), New Zealand Dollar (NZD) has seen the GBP give back around 6 weeks of gains with the price retracing off 0.4340 (2.3040) Wednesday to clock 0.4415 (2.2650) this morning. This marks the single biggest week of gains by the NZD since November last year reflecting a re-pricing of RBNZ policy while the Bank of England (BoE) has been trapped by weak UK growth with slowing domestic demand and higher fuel prices, but most importantly the growing cost of QE post covid. On the chart the NZDGBP sits at the early March high – the test will be if the kiwi can hold these levels and crack resistance.
The current interbank midrate is:NZDGBP 0.4420GBPNZD 2.2624
The interbank range this week has been:NZDGBP 0.4335- 0.4423GBPNZD 2.2606- 2.3065
Positive prospects of a deal in the Strait of Hormuz between the US and Iran saw the Australian Dollar (AUD) spike higher against the US Dollar (USD) to trade at 0.7160 early Friday the greenback being sold off as tensions eased. However, in the past hour we have seen small sell off retracing to 0.7150 as “no deal” hit the wires. A retest of 0.7200 may be tough in the short to medium term with the RBA scaling back rate hike expectations. The RBA may be nearing the end of its tightening cycle with inflation moderating of late. With tensions also the focus in the Middle East resulting in surges to energy prices making for broader “risk aversion” – this also supports momentum to the downside for the Aussie.
The current interbank midrate is:AUDUSD 0.7164
The interbank range this week has been:AUDUSD 0.7096- 0.7181
The Australian Dollar (AUD), British Pound (GBP) has been steady this week with no real bias of direction. Into Friday sessions we have 0.5330 (1.8760) on the chart, the top of the recent 2-week range. Australian CPI Wednesday knocked back the Aussie, the figure publishing at 4.2% down on expectations of 4.4% and the March number of 4.6%. This softer inflation number has investors speculating the RBA could be near the top of their tightening cycle. We are picking a retest of the low at 0.5280 (1.8950) over the coming sessions.
The current interbank midrate is:AUDGBP 0.5327GBPAUD 1.8772
The interbank range this week has been:AUDGBP 0.5302- 0.5336GBPAUD 1.8740- 1.8858
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