• Daylight Saving Time Shift in New Zealand this weekend. Clocks forward.
• Trump is hosting Xi at the White House at the moment over 3 days. The Chinese president was welcomed by a military flyover before agreeing to extend their one-year trade truce by two months.
• US and Iran officials are discussing a deal to end the closure in the Strait of Hormuz. The proposed scenario would end the shipping disruptions with Iran allowing navigation through the Strait in return for the US lifting its blockade and returning seized assets back to the Tehran.
• Australian Unemployment hits 4.6% the highest since 2021 rising 39,500 in August after expectations of 20,000.
• A heavy run of risk off sentiment Thursday and early Friday sent antipodean currencies to recent lows.
• Oil prices track back under 100.00 to 95.00 per barrel amid reports Xi and Trump could be working to restore Persian Gulf exports.
• The Bank of England (BoE) left interest rates unchanged last week at 3.75% in a 6-3 vote. Central Bank chances of a hike at the November meet have increased to 70% over the past few days.
• German and French manufacturing improve in September, however a loss of momentum due to increased energy costs has been felt across both regions.
• The strongest G10 board currency in September thus far has been the US Dollar (USD) while the worst performing currency is the Australian Dollar (AUD).
The New Zealand Dollar (NZD) has retreated a cent lower from early week levels clocking 0.5650 against the US Dollar (USD) this morning. Risk markets based on geopolitical tensions have been poor all week with the greenback in charge. Equity markets have been weighed down as inflation risks remain elevated and firmly in focus. Support at 0.5630 is in sight, if the kiwi can catch a break bouncing off this zone it may have a chance to form a bullish shift higher. Next week’s NFP will play a part.
The current interbank midrate is: NZDUSD 0.5658
The interbank range this week has been: NZDUSD 0.5649- 0.5748
The 5-week winning streak by the Australian Dollar (AUD) has ended with price moving away off recent lows against the New Zealand Dollar (NZD) back to 0.8080 (1.2380) in morning trade. Markets clearly are not ready for the 79’s just yet bouncing off 0.8006 (1.2490) earlier in the week. Unemployment in the Australian economy rose from 4.5% to 4.6% yesterday reaching covid levels. Governor Bullock saying while this isn’t ideal it will take the heat out of inflation. This may cause the RBA to postpone the baked in hike planned in November. However, for the meantime its reasonably guaranteed the RBA will hike next week to 4.6%.
The current interbank midrate is: NZDAUD 0.8071 AUDNZD 1.2385
The interbank range this week has been: NZDAUD 0.8007- 0.8093 AUDNZD 1.2355- 1.2489
The 5-week winning streak by the Australian Dollar (AUD) has ended with price moving away off recent lows against the New Zealand Dollar (NZD) back to 0.8080 (1.2380) in morning trade. Markets clearly are not ready for the 79’s just yet bouncing off 0.8006 (1.2490) earlier in the week. Unemployment in the Australian economy rose from 4.5% to 4.6% yesterday reaching covid levels. Governor Bullock saying while this isn’t ideal it will take the heat out of inflation. This may cause the RBA to postpone the baked in hike planned in November. However, for the meantime its reasonably guaranteed the RBA will hike next week to 4.6%.
The current interbank midrate is: NZDAUD 0.8071 AUDNZD 1.2385
The interbank range this week has been: NZDAUD 0.8007- 0.8093 AUDNZD 1.2355- 1.2489
The Australian Dollar (AUD) has fallen away sharply over the week with geopolitical tensions supporting the US Dollar (USD). Persistence inflation has kept the AUD well supported on dips until recently but with fresh Fed hike expectations steering buyers back into the greenback, we have seen the cross post 0.7005 this morning marking the lowest level since early August. Focus turns to next week’s RBA cash rate meet with 90% predications the central bank should hike to 4.60%. Once markets digest the proposed US/Iran plan to reopen the Strait of Hormuz we may get a spike higher.
The current interbank midrate is: AUDUSD 0.7008
The interbank range this week has been: AUDUSD 0.7005- 0.7140
The Australian Dollar (AUD) has retreated several times off the key 0.5340 (1.8740) level over the past few weeks doing it again Wednesday to fall away to 0.5295 (1.8885) as I write. Markets are pricing in a 90% chance of a hike at next week’s RBA meet so we are a little surprised to see downside moves by the Aussie in the past day or so. With UK services costs rising inflation is still a concern for the Bank of England reinforcing expectations for a hike in November.
The current interbank midrate is: AUDGBP 0.5303 GBPAUD 1.8857
The interbank range this week has been: AUDGBP 0.5296- 0.5336 GBPAUD 1.8738- 1.8880
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