- Fed rate cut projections weigh on markets after weaker US jobs data.
- The EU will delay retaliating against US tariffs for 6 months in order to ease transatlantic trade tensions.
- RBA rate cuts weigh on sentiment weakening the currency Monday.
- The Trump administration have said they will significantly raise tariffs on India penalising the economy for buying Russian Oil.
- The Japanese Yen (JPY) was the strongest performing currency last week with the New Zealand Dollar (NZD) the worst performer on the main board.
The New Zealand Dollar (NZD) improved into the weekly close against the US Dollar (USD) coming off 0.5850 levels to recover to 0.5910 in the wake of US Non-Farm Payroll releasing. The US jobs market is showing signs of weakening with rate cuts the talk of town, Fed’s Daly saying with plenty of uncertainty it may make it difficult for the fed to start cutting too quick. This week’s NZ unemployment rate should show a rise from 5.1% to 5.3% for June raising questions on if we will see a 50-point rate cut on the 20th of August.
Current Level: 0.5912
Support: 0.5880
Resistance: 0.6100
Last week's range: 0.5853 - 0.6034
The New Zealand Dollar (NZD) has pushed up from 0.5900 levels over the week against the US Dollar (USD) to trade around 0.5950 into Friday. NZ Labor data came in soft with the unemployment rising from 5.1% to 5.2% slightly lower than the 5.30% predicted. It has however strengthened the case for the RBNZ to cut interest rates on Aug 20—possibly 50 points with headwinds for the NZ economy remaining. NZ inflation expectations declined from 2.29% to 2.28% out 2 years. Tariff talk has sunk the greenback along with dovish remarks from the Fed, we may see the kiwi track higher towards 0.6000 heading into the close.
The current interbank midrate is: NZDUSD 0.5958
The interbank range this week has been: NZDUSD 0.5880- 0.5971
The Australian Dollar (AUD) pushed higher late in the week against the New Zealand Dollar (NZD) coming off 0.9175 (1.0900) to trade around 0.9125 (1.0960) into early Tuesday. Second quarter Australian inflation came in at 2.1% after 2.2% was predicted (prior 2.4%) due to slower rises in insurance and rental costs. The lowest read since March 2021. This has supported the case for a rate cut by the RBA when they meet next week. We expect prices to retest the 0.9100 (1.0990) zone this week.
Current Level: 0.9132
Support: 0.9090
Resistance: 0.9185
Last week's range: 0.9120 - 0.9189
Current Level: 1.0940
Support: 1.0890
Resistance: 1.1000
Last week's range: 1.0882 - 1.0964
We are still seeing a lack of direction in the Australian Dollar (AUD), New Zealand Dollar (NZD) cross with price still bouncing around 0.9130 (1.0950) areas. Earlier in the week we did see AUD bids come through with prices reaching 0.9110 (1.0980) but this area never held. Trump’s surprise tariff on NZ exporters of 15.0% instead of the earlier 10.0% has raised questions around the competitiveness of several exporting sectors such as wine and meat. It’s expected that any price increases to product will be soaked up mostly by US consumers. Down the road there also may be a shift in where these products are sold while exporters explore other markets. Meanwhile NZ unemployment rose to 5.2% off 5.1% the highest level since late 2016. Next week’s RBA cash rate cut of 25 points could shift the NZDAUD into the low 92’s.
The current interbank midrate is: NZDAUD 0.9137 AUDNZD 1.0933
The interbank range this week has been: NZDAUD 0.9108- 0.9165 AUDNZD 1.0911- 1.0979
The New Zealand Dollar (NZD) extended declines Monday off 0.4460 (2.2430) reaching a fresh 10-day low of 0.4445 (2.2500) early today as RBNZ rate cuts loom large. The Bank of England (BoE) meet Thursday and are widely expected to cut interest rates from 4.25% to 4.00% in an 8-1 vote. Back-to-back contractions in GDP prints and rising inflation are a worry with the latest inflation number coming in at 3.6% after 3.4% was forecast. Prices in the pair may struggle to push below 0.4425 (2.2600) this week.
Current Level: 0.4446
Support: 0.4405
Resistance: 0.4500
Last week's range: 0.4444 - 0.4486
Current Level: 2.2492
Support: 2.0030
Resistance: 2.2700
Last week's range: 2.2292 - 2.2500
Plenty of volatility this week in the British Pound (GBP), New Zealand Dollar (NZD) has the seen price go to all corners. The kiwi clawed back losses midweek to 0.4460 (2.2430) before the Bank of England (BoE) cash rate release took the NZD/GBP lower to 0.4425 (2.2600) early Friday as the central bank delivered a hawkish cut. The BoE cut rates by 25 points to 4.0% as widely predicted but the vote was a close call at 5-4 signalling not all members were convinced of a continuing easing plan. We pick a retest to the top of the 4-month low around 0.4400 (2.2700) in the coming couple of weeks.
The current interbank midrate is: NZDGBP 0.4431 GBPNZD 2.2568
The interbank range this week has been: NZDGBP 0.4424- 0.4461 GBPNZD 2.2414- 2.2599
The New Zealand Dollar (NZD) consolidated Monday around 0.5110 (1.9570) against the Euro after being up at 0.5150 (1.9300) levels mid last week post a slew of bumper Eurozone data. German and Spanish inflation both came in aligning with predictions and the ECB may be nearing the end of their rate cutting cycle. Also of note was Friday’s sharp USD sell off as the EUR/USD moved from 1.1400 to 1.1570. Support sits at 0.5080 (1.9680) in the NZD/EUR cross.
Current Level: 0.5109
Support: 0.5100
Resistance: 0.5180
Last week's range: 0.5102 - 0.5186
Current Level: 1.9573
Support: 1.9300
Resistance: 1.9630
Last week's range: 1.9281 - 1.9598
The Australian Dollar (AUD) lost ground Monday against the US Dollar (USD) dipping off 0.6490 to post 0.6460 early this morning as rate cuts loom. The RBA is expected to cut their cash rate to 3.6% at next week’s meeting marking the 6th cut since August 2024 based on deteriorating jobs data and slowing growth. Fed cuts are also being talked about with predictions the Fed may cut 50 points in September if the economy weakens further. Non-Farm Payroll Friday showing obvious signs the economy is stuttering.
Current Level: 0.6472
Support: 0.6400
Resistance: 0.6600
Last week's range: 0.6418 - 0.6585
Tariff chatter has deteriorated the US Dollar (USD) this week across the board with the Australian Dollar (AUD) reversing off 0.6425 late last week to kick back well posting 0.6520 this morning. Australian household spending grew 4.8% y/y in June despite falling 0.5% m/m led by rising household costs. Cooling migration and spending momentum could still cause economic concerns to the countries recovery despite facing lower tariffs (10.0%). Markets are forecasting a further 2 rate cuts this year likely to be next week and again in November. We pick a retest of 0.6590.
The current interbank midrate is: AUDUSD 0.6518
The interbank range this week has been: AUDUSD 0.6449- 0.6541
Despite the Australian Dollar (AUD) losing value last week against the British Pound (GBP) from 0.4900 (2.0400) levels to 0.4870 (2.0540) this morning the AUD is still bullish. Prices look to have respected the bottom of the channel from 0.4760 (2.10) late June. Further AUD strength may be restricted by recent CPI data (1.9% y/y vs 2.1% y/y) and the RBA delivering a 25-point cut on August 12th. Meanwhile this week’s focus is on the Bank of England policy vote Thursday with a cut from 4.25% expected.
Current Level: 0.4865
Support: 0.4760
Resistance: 0.4920
Last week's range: 0.4848 - 0.4900
Current Level: 2.0554
Support: 2.0320
Resistance: 2.1000
Last week's range: 2.0406 - 2.0626
The Australian Dollar (AUD) moved off 0.4880 (2.0480) late Thursday against the British Pound (GBP) to reach 0.4840 (2.0670) post the Bank of England (BoE) release. Breaking outside the 3-week support at 0.4860 (2.0580) the central bank firming a ‘hawkish” cut (4.00% down from 4.25%). The 5-4-member vote suggesting a careful easing plan ahead may be required as inflation and rising unemployment weigh on economic growth. Next week’s focus will be on the RBA meeting when they should cut to 3.60%.
The current interbank midrate is: AUDGBP 0.4847 GBPAUD 2.0631
The interbank range this week has been: AUDGBP 0.4839- 0.4889 GBPAUD 2.0453- 2.0665
Last week’s moves in the Australian Dollar (AUD), Euro cross saw prices go from 0.5585 (1.7900) to 0.5655 (1.7680) and back again to close the week where it all started. Initially Australian inflation (1.9% vs expected 2.1%) rallied the AUD before eurozone CPI came in as expected triggering a rebound and speculation the ECB may be nearing the end of their easing cycle. With no data on the docket this week we expect the EUR to retest the downside 0.5580 (1.7920) area.
Current Level: 0.5592
Support: 0.5540
Resistance: 0.5650
Last week's range: 0.5580 - 0.5660
Current Level: 1.7882
Support: 1.7700
Resistance: 1.8050
Last week's range: 1.7673 - 1.7920
