• The RBA left interest rates unchanged yesterday at 3.60%.
• The greenback is higher this week as markets turned “risk off”, US equity markets are down overnight with the Nasdaq leading the slump off 1.7%.
• Bitcoin has fallen below $100,000 for the first time since June 2023.
• US Government shutdown rolls on. Reports suggest this will end by this weekend.
• Trump’s disapproval rating has risen to 63%, the highest in either term. The soft underbelly of the Trump presidency is the tariffs and the struggles with working class voters who are paying inflated prices for basic goods.
• ECB’s Rehn has been on the wires saying the uncertainty of economic developments remain high.
• New Zealand Global Dairy Trade Auction price index -2.4% vs -1.4% previous.
• The Euro (EUR) is the strongest currency at the moment with the New Zealand Dollar (NZD) the worst performing.
The New Zealand Dollar (NZD) has slumped to 0.5650 this morning against the US Dollar (USD) the lowest level since early April. Disappointing Chinese manufacturing data has weighed on sentiment. The weaker release signals a loss of industrial momentum and may continue to effect risk-based currencies like the kiwi for a while. Also of note was a “remain” to the RBA cash rate at 3.6%, the news dragging the kiwi lower with the AUD. NZ unemployment has risen to 5.3% in the month of September higher than the 5.2% in August. The kiwi may continue its bearish mood into the weekly close.
Current Level: 0.5641
Support: 0.5570
Resistance: 0.6000
Last week's range: 0.5713 - 0.5801
The RBNZ cut rates a further 50 basis points, at their last meeting, citing a sluggish economy and continued weak business confidence. The NZD plunged, following the decision, continuing to lose ground since, ever since. The weakness in the economy has at least been recognised by the RBNZ, but it will take a lot more than monetary assistance, to reverse the dire situation. The NZD has plunged below 0.5700 and looks likely to have more downside risk.
The current interbank midrate is: NZDUSD .5635
The interbank range this week has been: NZDUSD .5626 - .5725
The New Zealand Dollar (NZD) is setting up for a fresh daily long-term low against the Australian Dollar (AUD), currently the cross trades at 0.8695 (1.1500) if we can hold this level, it will post an August 2015 low. The RBA kept interest rates unchanged yesterday at 3.6% saying Core inflation wasn’t ideal with the RBA Governor viewing policy at “close to neutral”. NZ unemployment has weakened the kiwi further this morning publishing a touch higher than August’s 5.2% at 5.3% for September. We expect the cross to be down in the 85’s in the medium term.
Current Level: 0.8693
Support: 0.8635
Resistance: 0.8770
Last week's range: 0.8740 - 0.8846
The precipitous fall in the KIWI has led to a sharp shift in the NZD/AUD cross-rate trading range. The cross rate has plummeted from above 0.9000, a couple of months ago, to below 0.8700. This is a massive realignment and gathered pace when the RBA decided to hold rates, at their latest meeting, thereby widening interest rate differentials. The trend is likely to continue, until macro-economic circumstances reverse.
The current interbank midrate is: NZDAUD .8698 AUDNZD 1.1497
The interbank range this week has been: NZDAUD .8685 - .8751 AUDNZD 1.1425 - 1.1512
Current Level: 1.1494
Support: 1.1400
Resistance: 1.1580
Last week's range: 1.1304 - 1.1441
The New Zealand Dollar (NZD) looks to be making a play for last week’s low of 0.4250 (2.3520) against the British Pound (GBP) having started the week at 0.4360 (2.2920) the kiwi on the backfoot again due to poor Chinese data publishing. NZ Unemployment published this morning at 5.3% as predicted up from 5.2% in August devaluing the kiwi across the board. The Bank of England (BoE) meet tonight and should keep interest rates at 4.00% with a 25% chance they could cut to 3.75%.
Current Level: 0.4331
Support: 0.4255
Resistance: 0.4400
Last week's range: 0.4316 - 0.4385
The dominant factor in NZ FX markets is the collapse in the NZD, against all major cross rates and more especially the US Dollar. This is reflected in the cross rate, v the GBP, which has had its own problems. The UK economy is sinking fast, but all hopes are pinned on a game-changing budget, due later this month. This will not be a silver bullet, so expect more crises in the UK economy and the FX and Bond markets. The NZD/GBP cross rate has now dipped below 0.4300.
The current interbank midrate is: NZDGBP .4291 GBPNZD 2.3305
The interbank range this week has been: NZDGBP .4286 - .4357 GBPNZD 2.2893 - 2.2317
Current Level: 2.3089
Support: 2.2750
Resistance: 2.3500
Last week's range: 2.2803 - 2.3167
The New Zealand Dollar (NZD) is on the backfoot this morning against the Euro (EUR) dropping to 0.4915 (2.0350) as it approaches the December 2009 low of 0.4880 (2.0480). NZ Unemployment rise slightly to 5.3% off 5.2% in August the news may keep the kiwi momentum bearish. Focus shifts to NZ inflation expectations and German economic sentiment.
Current Level: 0.4911
Support: 0.4900
Resistance: 0.4925
Last week's range: 0.4942 - 0.4981
The recent rebound in the US Dollar, triggered by a reluctance for the Fed to continue the rate cutting cycle, has pushed the EUR back below 1.1500. The weakness in the single currency, has not translated into the cross-rate against the KIWI, due to even more dramatic falls in the NZD. The weaker currency is a direct reflection in the economic woes suffered in both NZ and Europe.
The current interbank midrate is: NZDEUR .4881 EURNZD 2.0487
The interbank range this week has been: NZDEUR .4878 - .4965 EURNZD 2.0123 - 2.0504
Current Level: 2.0362
Support: 2.0300
Resistance: 2.0400
Last week's range: 2.0073 - 2.0232
The RBA left their cash rate unchanged yesterday at 3.60% as widely predicted with Governor Bullock saying previous rate cuts are still filtering through the economy and they are watching for the impact. Inflation is under control and policy is set in the right place right now. The Australian Dollar (AUD) retreated post announcement to 0.6485 around 0.6% on the day against the US Dollar (USD) and looks to retest the daily low at 0.6470 from late August. US Non-Farm payroll publishes Saturday if the US govt reopens.
Current Level: 0.6487
Support: 0.6460
Resistance: 0.6600
Last week's range: 0.6525 - 0.6617
The RBA failed to extend the rate cutting cycle, embarked upon recently, to stimulate the economy. The RBA cited resurgent inflation, as the cause for the decision, to halt the rate cuts. This had the impact of stabilising the AUD which had been deteriorating quickly. The AUD has fallen to below 0.6500, but the latest decision, has seen the AUD recover some mojo. Inflationary pressures remain the primary concern for the RBA, while the Government, looks for a way to right the fiscal ship.
The current interbank midrate is: AUDUSD .6480
The interbank range this week has been: AUDUSD .6462 - .6560
The Australian Dollar (AUD) fall to 0.4960 (2.0170) in early week trade against the British Pound (GBP) before recovering losses post the RBA rate announcement. The RBA has kept interest rates unchanged at 3.6% with Governor Bullock siting elevated inflation despite sign of softening domestic demand. CPI last week showed a rise to inflation from 1.1% to 1.3% y/y. The AUD is back at 0.4985 (2.0070) as I write. Late tonight the Bank of England (BoE) interest rate publishes with consensus the central bank will keep the rate at 4.00% with a 25% chance they may cut.
Current Level: 0.4980
Support: 0.4840
Resistance: 0.5030
Last week's range: 0.4901 - 0.5005
AUD/GBP fell about 1% to .4930 range overnight as risk-off sentiment hit the Aussie, while UK fiscal worries limited pound gains. The move reflects market caution, with the pair likely to steady unless data or risk appetite shifts. All eyes will be on upcoming Australian economic releases for signs of potential rebound.
The current interbank midrate is: AUDGBP .4930 GBPAUD 2.0284
The interbank range this week has been: AUDGBP .4925 - .4995 GBPAUD 2.0020 - 2.0286
Current Level: 2.0080
Support: 1.9870
Resistance: 2.0670
Last week's range: 1.9977 - 2.0402
The Euro (EUR) tested the long-term low at 1.7570 (0.5690) early in the week before bouncing back to 1.7700 (0.5690) in morning trade against the Australian Dollar (AUD). The RBA left interest rate unchanged at 3.60% the Aussie coming off over 0.5% since. Eurozone inflation eased to 2.1% y/y from 2.2% staying above the ECB’s 2.0% target due to lower food prices. Earlier the ECB left interest rates unchanged for the third meeting adopting a cautious wait and see approach.
Current Level: 0.5649
Support: 0.5570
Resistance: 0.5680
Last week's range: 0.5612 - 0.5689
The EURO has been under extreme pressure, for the last week or so, as interest in the US Dollar has reignited. The EUR weakness allowed the cross rate with the AUD to improve earlier in the week, heading up towards 0.5700 but has since come off to just under 0.5600 after stronger EUR data out last night. This is despite the problems the AUD has faced, which remain relatively mild, allowing the AUD/EUR to become even more attractive.
The current interbank midrate is: AUDEUR .5611 EURAUD 1.7822
The interbank range this week has been: AUDEUR .5606 - .5694 EURAUD 1.7554 - 1.7820
Current Level: 1.7702
Support: 1.7600
Resistance: 1.7950
Last week's range: 1.7578 - 1.7818
