NZD
It was a quiet week in New Zealand last week data wise.  The results for the March quarter of producer prices showed that input prices fell 2.5 percent, while output prices fell 1.4 percent.

International travel and migration for April showed a seasonally adjusted net inflow of 2,160 people was recorded in the month, taking the annual total to 9,176.  In April credit card spending rose 2.3 percent in the month, following a 2.8 percent fall in March.

The budget this week will show a deteriorating fiscal position, but all eyes will be on measures taken to reverse the upward trending debt track. Other data this week will be looked to for further signs of stabilization.

AUD
After rising by 8.3 percent in April, consumer sentiment pulled back by 4.3 percent in May to 88.8 that is 11 percent below its long term average.  The largest fall of the survey was in regards to the economic outlook in Australia for 5 years ahead, which fell by a large 13.6 percent.

The week ahead:
NZD
Tuesday 26th – Trade Balance (Apr), RBNZ 2yr Inflation Expectation
Wednesday 27th – NBNZ Business Confidence (May)
Thursday 28th – Annual Budget
Friday 29th – Building Permits (Apr) mom

AUD
Wednesday 27th – Westpac Leading Index (Mar) mom, DEWR Skilled Vacancies (May) mom
Thursday 28th – Private Capital Expenditure (Q1), Construction Work Done (Q1)
Friday 29th – Private Sector Credit (Apr)

GBPNZD
CPI data in the UK moved to 2.3 percent from 2.9 percent.  Retail sales printed at 0.9 percent against and expected 0.5 percent and while it’s a good sign rising unemployment and uncertainty about job prospects will keep High St in check.

There was little difference in the movements of the GBPNZD rate last week from previous weeks.  The rate again stuck between the 2.55 – 2.61 level, spending the majority of its time in the 2.57’s-2.58’s.

Focus this week will surround the budget out in New Zealand on Thursday, surrounding the announcement we could see some volatility and a possible sterling rally and push above the GBPNZD 2.60 resistance level could be on the cards.

The week ahead in the UK:
Friday 29th – Gfk Consumer Confidence Survey (May)

GBPAUD
Movements were a mixed bag in this pairing last week, Sterling dominated movements in the first half of the week with the rate again dipping below the GBPAUD 2.0 level.  From Wednesday onwards the Australian dollar made back some ground on Sterling and closed play at a healthier 2.031 level. 

If the current Australian dollar momentum continues a conservative 2 cent climb in the Australian dollars cards could be feasible this week, with the GBPAUD climbing into the 2.05’s by the end of the week.  For data out in the UK please refer to GBPNZD above.

EURNZD
German ZEW business climate soared higher posting a 7th consecutive month of positive movement bolstering the euro. Also in the Euro-zone trade balance for March came in stronger than expected at -2.1bn from the previous -2.9bn result.

Despite some positive results out in the Euro-zone the Euro lost ground to the New Zealand Dollar last week.  At opening on Monday the rate had dipped below the 2.30 level and then ricochet between the 2.255 to 2.29 level, closing on Friday in New Zealand dollars favour at 2.2627.  This week the same levels could be expected with a slight rally coming for the Euro toward the latter part of the week.

The week ahead in the Euro zone:
Monday 25th – IFO Business Climate (May)
Tuesday 26th – German GDP (Q1) qoq/yoy, Gfk Consumer Confidence Survey (Jun) Europe Current Account (Mar)
Thursday 28th – German ILO Unemployment Rate (Apr)

EURAUD
The rate mimicked the travels of a boomerang last week, it ended at the same level of 1.787’s where it began the week.  With an even spread of data out in both Australia and the Euro zone this week one could expect this pair to get comfortable in the 1.75 – 1.80 band this week trading towards the higher end for the majority of them time.  For data out in the Euro zone please refer to AUDNZD above.

NZDUSD
Given the reintroduction of US dairy subsidies announced over the weekend suggesting our basket of commodity prices are likely to be lower not higher, the New Zealand dollar could be getting ahead of itself and see a dip in the rate off the back of this announcement.  The NZD will contend with the Budget this week and surrounding the unveiling in New Zealand on Thursday we could see the NZDUSD rate dip below the 0.60 level.

The week ahead in the US:
Wednesday 27th – Consumer Confidence (May)
Thursday 28th – House Price Index (Mar) mom, Existing Home Sales (Apr)
Friday 29th – Initial Jobless Claims (w/e May 24), New Home Sales (Apr)
Saturday 30th – GDP Annualised (Q1)

AUDUSD
As with the NZDUSD rate the Australian dollar continued its gains on the USD last week.  The AUD steadily gained throughout the week to close on Friday just above the AUDUSD 0.785 level.  The question at the moment is how long the Australian Dollar will be able to maintain this rally.  Talk of global trade subsidies will not benefit Australia either.  The AUDUSD 0.79 level is a major resistance for the AUD and the we could see the rate fall into the 0.76’s this week.  For data out this week in the US please refer to NZDUSD above.

AUDNZD
New Zealand dollar is still shadowing the moves by Australian Dollar with many of its pairings but has picked up its game and has pushed the rate back down into the lower level of the recent 1.25 – 1.28 band.  Last week the rate kicked off at 1.285 and then fell marginally day to day to close on Friday at AUDNZD 1.265, a two cent gain in New Zealand dollars favour.
Surrounding the budget release in New Zealand on Thursday the AUDNZD rate could experience some turbulence and push a fraction higher up towards the 1.28 level again.

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Please feel free to contact me (renee.doughty@worldfirst.com) if you have any questions or thoughts regarding these updates or if you are interested in a particular event in the calendar.
 
If you would like to discuss your foreign exchange requirements then please don’t hesitate to call our Southern Hemisphere Office on our New Zealand Free phone number  0800 666114 , or Australian Free phone number 1800 701540.
 
Disclaimer: The above comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgement as of the date of the briefing and are subject to change without notice.
Any rates given are “interbank” i.e. for amounts of £5million and thus are not indicative of rates offered by World First for smaller amounts.