• Reserve Bank of New Zealand interest rate cuts loom large and weighs on the NZD early this week.
• US Consumer Confidence 58.2 vs 58.7 expected.
• RBA widely predicted to keep its interest rate unchanged later today.
• US President Trump met with his 4 congress leaders Monday as the deadline for a possible government lockdown looms. Without funding legislation in place, the govt could close down on Wednesday. If this happens we will see no NFP- Non-farm payroll release Friday night.
• Fed’s Bowman entered the rate cut camp Friday saying the Fed’s payroll revisions show a deeper problem and are behind the 8 ball with reducing rates.
• The Bank of England (BoE) inflation forecast is for CPI to trend higher before stalling and tapering off largely due to a loosening labour market.
• The Japanese Yen (JPY) is the strongest currency this week while the New Zealand Dollar (NZD) is the weakest performer on the main board.
US Government shutdowns remain high and could happen as soon as Wednesday if legislation isn’t passed by congress today. The New Zealand Dollar (NZD) remains bearish as we head into the week, against the US Dollar (USD) prices are just off last week’s long-term low at 0.5750 at 0.5780 this morning. Today’s RBA cash rate announcement may see the kiwi copy moves If we get any surprises from a hold at 3.6%. US pending home sales increased 4.0% in August highlighting a slowdown in the US economy could be all talk, this data may show the economy does in fact remain resilient. On the economic docket is non-farm payroll Friday night predicted to show an improvement to job numbers.
Current Level: 0.5777
Support: 0.5750
Resistance: 0.6000
Last week's range: 0.5753- 0.5870
The New Zealand Dollar (NZD) enters its 10th week of declines against the outperforming Australian Dollar (AUD) dropping further Monday to clock 0.8780 (1.1390). The scary thing for buyers of AUD is that we see no large shifts in sight. Today’s RBA interest rate release is widely expected to be a hold at 3.60%, will Governor Bullock take a cautious tone based on a strong labour market influencing the probability of a cut at their November meet.
Current Level: 0.8778
Support: 0.8755
Resistance: 0.8945
Last week's range: 0.8812- 0.8909
Current Level: 1.1381
Support: 1.1180
Resistance: 1.1420
Last week's range: 1.1224- 1.1348
The New Zealand Dollar (NZD) has extended losses at the weekly open against the British Pound (GBP) the 3rd week straight posting 0.4300 (2.3240) this morning a new daily low last seen in October 2016 following the carnage of post Brexit voting. With a minimum of 75 points cut planned by the RBNZ this year we can’t see the NZD making any sustainable recovery any time soon. Later in the week BoE governor Bailey speaks.
Current Level: 0.4300
Support: 0.4230
Resistance: 0.4345
Last week's range: 0.4302- 0.4358
Current Level: 2.3255
Support: 2.3015
Resistance: 2.3650
Last week's range: 2.2943- 2.3241
There is certainly no stopping the Euro (EUR) as its climbed further against the New Zealand Dollar extending gains to 2.0300 (0.4925). This is the lowest price in the cross since January 2009. Despite inflation rates around 2.0% and inflation controlled, rising trade uncertainties with US tariffs could throw a spanner in the works with a dovish EUR shift. Diverging central banks should keep the NZD on the back foot for a while longer.
Current Level: 0.4925
Support: 0.4865
Resistance: 0.5030
Last week's range: 0.4930- 0.4347
Current Level: 2.0304
Support: 1.9890
Resistance: 2.0550
Last week's range: 2.300- 2.0281
The Australian Dollar (AUD) has extended its push higher against the US Dollar (USD) in early week trade posting 0.6575 as today RBA looms. The Australian central bank is widely predicted to keep the cash rate on hold today at 3.6% but the statement and Governor Bullock’s press release will no doubt be carefully analysed for hints on near term policy. Fears of a US govt shutdown tomorrow seems possible as a last-minute agreement looks slim as the major political parties seem far apart. This may weigh on risk markets.
Current Level: 0.6577
Support: 0.6500
Resistance: 0.6600
Last week's range: 0.6520- 0.6627
The Australian Dollar (AUD) sits just above the long-term high this morning at 0.4900 (2.0410) against the British Pound (GBP). A break past 0.4915 (2.0340) will signal a fresh March high in the cross. With a slew of bearish AUD crosses the AUD/GBP is faring pretty well in comparison. Today’s RBA cash rate announcement should highlight no change from the 3.6%- however the statement will be closely watched as markets “hone in on” future policy clues.
Current Level: 0.4895
Support: 0.4835
Resistance: 0.4920
Last week's range: 0.4872- 0.4911
Current Level: 2.0430
Support: 2.0330
Resistance: 2.0690
Last week's range: 2.0359- 2.0524
An RBA hold is all but baked into the Australian Dollar (AUD), Euro (EUR) cross but it will be the statement later today which could be interesting. Policy suggests the central bank is done with cuts this year, but a growing portion of markets think this may not be the case and leaving investors on edge. With inflation predicted to come in around 2.5% in the third quarter (29 October) will we see a shift in mood? Meanwhile, Eurozone “flash” CPI y/y is predicted to come in at 2.3% tomorrow.
Current Level: 0.5609
Support: 0.5585
Resistance: 0.5580
Last week's range: 0.5576- 0.562
Current Level: 1.7828
Support: 1.7600
Resistance: 1.7900
Last week's range: 1.7775- 1.7932
