• New Zealand Unemployment jumps to 5.6% in July- the highest in 11 years.
• Bank of America see 3 Fed hikes through to the end of 2026 before inflation dips lower reaching mid 2% by the end of 2027.
• Australian June trade surplus 1.92B vs a deficit of 1.1B expected.
• A proposed Iran/Oman deal to end the Hormuz Strait conflict would give Iran shipping control over inbound shipping which the US wouldn’t accept based on giving over access rights. Also of consideration is the sticking point of fees with the Tehran wanting 5-7% of the shipping value while Oman is seeking only 3.0%. Washington wants no fees which shows how far apart the parties are to an agreement.
• Oil settles around $77.00 after reports Iran could bar US and Israeli ships from the Hormuz waterway.
• The strongest main board currency last week was the New Zealand Dollar (NZD) while the worst performing currency was the Japanese Yen (JPY) after giving back a chunk of its early week rally.
All eyes are on the pending US Non-Farm payroll release early tomorrow the key data of the week. Markets are typically a little unresponsive in the days leading up to this release the New Zealand Dollar (NZD), US Dollar (USD) cross no exception. Prices have been drawn to rangy action between 0.5860 and 0.5900 with no real directional interest over the week. The kiwi still sitting above the 100-day moving average perhaps signalling bigger picture upside bias to come. Risk market seems reasonably ‘risk on” as we wait for a Trump decision on the Iran/Oman deal.
The current interbank midrate is: NZDUSD 0.5866
The interbank range this week has been: NZDUSD 0.5856- 0.5899
The Australian Dollar (AUD) has had the edge this week over the New Zealand Dollar (NZD) reaching 1.2020 (0.8320) and settling around 1.1980 (0.8350) into early Friday. However, the cross is still trending bullish from late June’s 0.8160 (1.2260) levels with the kiwi well supported on dips. NZ employment rose unexpectedly to 5.6% off first quarter’s 5.4% raising eyebrows, the highest level in over a decade. Both central banks have said they stand ready to raise interest rates if inflation starts to blow out. The NZ jobs numbers may have weakened the case for aggressive rises but may not have derailed market expectations of the RBNZ raising further at least in the near term. Next week’s RBA meeting will be watched with interest- no rise to 4.35% is predicted.
The current interbank midrate is: NZDAUD 0.8345 AUDNZD 1.1975
The interbank range this week has been: NZDAUD 0.8320- 0.8394 AUDNZD 1.1912- 1.2018
The New Zealand Dollar (NZD) rejected the zone around 0.4360 (2.2950) against the British Pound (GBP) keeping inline with recent bull channel trend to trade at 0.4365 (2.2915) into Friday sessions. Last weeks Bank of England’s hold at 3.75% had been widely expected after a drop in inflation (2.6%) however the bank will no doubt raise in their September 17th meet if data worsens. A break below 0.4350 (2.3000) in the pair would confirm a break of structure and a possible shift towards stiff support at 0.4335 (2.3070)
The current interbank midrate is: NZDGBP 0.4359 GBPNZD 2.2941
The interbank range this week has been: NZDGBP 0.4353- 0.4383 GBPNZD 2.2811- 2.2972
The Australian Dollar (AUD) is still sitting in a nice bull channel from the late June low of 0.6860, clocking 0.7063 this morning against the US Dollar (USD). Midweek ADP US job numbers dipped below expectations giving investors the jitters around tonight’s US Non-Farm payroll release and unemployment read. On the topside if we can build further bullish momentum above 0.7050 and the 100-day moving average we could expose 0.7070 the 50% Fib level. The RBA monetary statement is next week, the central bank is expected to hold interest rates at 4.35%.
The current interbank midrate is: AUDUSD 0.7028
The interbank range this week has been: AUDUSD 0.6983- 0.7063
The Australian Dollar (AUD) has extended weekly moves to the upside against the British Pound (GBP) posting 0.5230 (1.9120) Friday at the close of the NY session, remaining well supported off mid-June lows. Last week’s interest rate hold at 3.75% by the Bank of England (BoE) was slightly more hawkish than markets were expected given improved inflation data loosened the need for immediate hikes. Moves through to next week’s Reserve Bank of Australia rate decision may be driven off geopolitical headlines. For the meantime we think the cross could retest recent highs.
The current interbank midrate is: AUDGBP 0.5223 GBPAUD 1.9146
The interbank range this week has been: AUDGBP 0.5192- 0.5244 GBPAUD 1.9067- 1.9258
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