Aussie well supported despite mortgage rate increases by ANZ and CBA

Key Movers

The New Zealand Dollar has managed to recoup early losses from the week where we saw the pair touch a multi-year low of 0.6530 vs the Greenback. During Asian trade on Thursday the Kiwi momentarily pushed through the psychological resistance level of 66c touching 0.6616 before a pull back down to 0.6575 during the early European session. With little in the way of local data the Kiwi has moved within quite a tight range of 60 pips and at the time of writing the pair is sitting at 0.6590.



On the crosses, NZD/AUD buys 0.9149 and the NZD/EUR is weaker again at 0.5668

Looking ahead the Reserve Bank of New Zealand Governor Adrian Orr will be delivering a speech titled "Geopolitics, New Zealand and the Winds of Change" at a national conference co-hosted by the Financial Services Council and Workplace Savings NZ, in Auckland.



On the technical front, the NZD/USD sees immediate resistance up at 0.6615 followed by 0.6660, with support sitting at 0.6570 and 0.6530.


The Great British Pound extended gains on Thursday on the back of a weak US dollar but remained well below highs hit in the previous session due to uncertainty over the progress of the Brexit negotiations. The GBP/USD pair reached a 24-hour high of 1.2961. News overnight that German Chancellor Angela Merkel’s government is preparing for all Brexit scenarios, including a no-deal, weighed on sentiment on Thursday.



Looking ahead today and there are no macroeconomic events scheduled in the UK for this Friday.

From a technical perspective, the USD/GBP pair is currently trading at 1.3180. We continue to expect support to hold on moves approaching 1.2890 while now any upward push will likely meet resistance around 1.2930.


The Dollar pared recent gains, edging lower through trade on Thursday as investors positioned them selves ahead of Fridays labour market data. Having touched two-week highs on Tuesday the dollar uptick stalled as investors prepare for a softening or slowdown in payroll performance. Thursdays ADP private payroll report printed below expectations. While typically a poor leading indicator of broader labour market performance the softer read could suggest employment growth is starting to turn following a sustained and long-term upside.


Falling 2 tenths of a percent the dollar index correction was amplified by a push toward safe haven JPY and CHF as trade concerns continue to weigh on the minds of investors. While we expect investors to buy into the dip a softer labour market and wage growth print may prompt a deeper correction into the weekend.


Attentions remain squarely focused on Non-farm payroll data while trade and emerging market concerns dictate broader risk appetite demand. Markets will be keenly attuned to any announcement regarding the imposition of additional US tariffs as the period for public consultation on an additional 200bn in China trade taxes ends today.


The Euro traded within a tight range for most of Thursday with little to excite investors on the domestic calendar. Opening this morning at 0.1623, the Euro remains relatively unchanged ahead of President Trumps widely expected announcement of $200bn tariff on China.




The market remains relatively skittish this week as the risk-off environment continues to dominate market sentiment. Looming over market movements is the on-going US-China trade war which will potentially escalate further today leaving the Euro in a holding pattern ahead of this news. Supporting the Euro within this context was a poor US non-farm employment reading with 163,000 jobs added against the expected 190,000 which saw the USD depreciate marginally against a number of currencies, including the Euro.



With little on the agenda domestically to drive direction today, attentions remain fixed on the headlines with the focus squarely on any announcements from the USA.


The USD/CAD pair gained touched its highest level since July 20 at 1.3225 overnight on the back of a sharp fall seen in crude oil prices weighed on the commodity-sensitive loonie.




On the data front yesterday we saw the release of Building Permits for the month of July which came in down 0.1% in June. The value of permits for residential buildings edged down 0.3% to $5.3 billion in July. The decline was mainly the result of lower construction intentions for multi-family dwellings, down 1.1% to $2.9 billion. Looking ahead today and all eyes will be on the Unemployment Rate decision which we are expected to see a rise from 5.8% to 5.9%.



From a technical perspective, the USD/CAD pair is currently trading at 1.3150. We continue to expect support to hold on moves approaching 1.3200 while now any upward push will likely meet resistance around 1.3290.