NZD
Data out in New Zealand last week showed total residential building consents rose 11.6 percent, excluding apartments, consents only rose 0.3 percent in February.  February credit growth showed total household claims rose by 0.2 percent.  The NBNZ Business Outlook for March showed headline confidence improved marginally in the month. 

The main focal point at present is obviously the flow-on from the G20 summit, which pundits have noted as marking a fundamental turning point for the global economy, and associated improvements in risk sentiment.

Turning to this week the main focus locally will be on the NZIER’s March quarter QSBO.  The broad themes from the survey are likely to mirror those from recent Business Outlooks, remain weak and highlight that the economy continues to contract.  

AUD
Out last week in Australia were retail sales with the results coming in worse than expected.  Sales printed on the low side in February down 2 percent.  On the upside building approvals surprised hugely, total approvals rose 7.8 percent with private house approvals up 0.1 percent but private other (apartments etc) jumped 34.1 percent in the month.

The week ahead:
NZD
Tuesday 7th – NZIER Business Opinion Survey (Q1)
Thursday 9th – Electronic Card Transaction (March)

AUD
Monday 6th – AiG Performance of Construction Index (March), ANZ Job Advertisements (March)
Tuesday 7th – RBA Interest rate Announcement
Wednesday 8th – Westpac Consumer Confidence (April), Home Loans (Feb), Investment Lending (Feb)
Friday 9th – Unemployment Rate (March)

GBPNZD
In the UK house prices rose by 0.9 percent in March according to the Nationwide Building Society, the first rise since October 2007.  The UK also saw the highest consumer confidence reading since last May. 
Sterling gained off the back of those results and we saw the GBPNZD rate rise to the high of the week on Wednesday of 2.5816, from there it was a slide in the New Zealand Dollars favour with the rate closing on Friday in the 2.51’s.

The week ahead in the UK:
Tuesday 7th – Industrial Production (Feb) mom, Manufacturing Production (Feb) mom
Wednesday 8th – Nationwide Consumer Confidence (March)
Thursday 9th – PPI Input and Output (March), Total Trade Balance

GBPAUD
Rallies from both sides saw this rate fluctuate in both directions last week.  The GBPAUD rate started off at 2.0831 early on with the rate climbing the latter half of Monday to the high of the week 2.0698.  From there it was somewhat of a downhill slide with the rate ending the week on Friday at 2.0632. 
Eyes will be on the Reserve Bank of Australia and their interest rate announcement on Tuesday, it is expected that they may hold rates constant with rate cuts of 100bps now a thing of the past, if they are to cut it is expected to be a conservative 25bps.  For data out in the UK please refer to GBPNZD above.

EURNZD
Headline news in the Euro zone was the ECB’s 25bps interest rate cut as opposed to the 50bps that 49 of 55 economists surveyed by Bloomberg expected. Hurting the EUR further was the weaker than expected economic confidence for March that came in at 64.6 and an unemployment rate increase of 0.2 percent, taking the unemployment rate for the Euro zone up to 8.5 percent.

The Euro has dropped a significant amount from its 2.55 peak at the beginning of March in which it has been steadily losing ground against the NZD, last week was no different.   The week began with the rate at 2.3415 climbing on Wednesday to 2.3751 from there it fell to close on Friday at 2.29.

The week ahead in the Euro zone:
Monday 6th – Retail Sales (Feb) mom, PPI (Feb) mom
Tuesday 7th – GDP (Q4) qoq
Wednesday 8th – Trade Balance (February)
Thursday 9th – Consumer Price Index (March) mom, Industrial Production (Feb) mom

EURAUD
It was a clear cut slide for the EUR against the Australian Dollar last week with the rate dropping 5 cents throughout the week.  The rate has not been down in these lower levels since the beginning of January and with the interest rate cut in the Euro zone along with optimism that the Australian economy is faring better than others around the globe the Australian Dollar capatalised with continued gains on the Euro. 

The interest rate decision in Australia on Tuesday may spark some slight volatility in the rate as the market is undecided whether we will see the Reserve Bank of Australia cut interest rates further or sit tight for the time being.   With commodity prices on the up we may continue to see this rate continue south, slowly but surely for the time being.   For data out in the Euro zone this week please refer to EURAUD above.

NZDUSD
US personal income rose by 0.2 percent in February, above forecasts of 0.1 percent while personal spending rose by 0.2 percent, in line with expectations.  Perhaps the best news last week on the US economy was the ISM manufacturing survey for March.  The overall manufacturing index was 36.3, up from 35.8 last month and marginally higher than forecasts of 35.7.

The NZDUSD rate hiked up last week, kicking off on Monday in the 0.56 region to climb steadily throughout the week and flirt with the 0.59 during trading on Friday.  The New Zealand Dollar may continue its climb this week and push beyond the 0.60 resistance level, however forecasts are not optimistic for the longer term with a dip below the 0.50 level at some point this year still on forecasts.
The week ahead in the US:

Wednesday 8th – Consumer Credit (Feb)
Thursday 9th – Wholesales Inventories (Feb)
Friday 10th – Trade balance (February), Initial Jobless Claims (w/e Apr 5th)

AUDUSD
Supporting a recovery in commodity prices and investor risk-appetite at present the Australian Dollar appreciated against the USD last week to end play on Friday at 0.7169, 3 cents from where the rate was on Monday.  The Australian Dollar may continue its rise against a basket of currencies this week and included in that basket will most likely be the USD as things as the economic situation in Australian moves to the bright side, the rate could continue its stint above the 0.70 this week.  For data out in the US please refer to NZDAUD above.

NZDAUD
The New Zealand relented some of its gains last week with the Australian Dollar pushing into the 1.24’s on Wednesday, the rate did fall quite suddenly on Friday to the 1.22 level as confidence results in New Zealand for March showed that feelings had slightly improved, signaling that New Zealand might be clawing its way out of the bottom of the trough.  This week momentum could continue and lead the rate further downwards in New Zealand Dollars favour, the 1.20 level key to watch surrounding the interest rate announcement in Australia on Tuesday.

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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 judgement. 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.