AUD/EUR nears two-month highs
US markets were closed overnight for the Labor Day holiday and instead markets focused on growing worries about political instability in France.
Prime Minister François Bayrou has called for an emergency parliamentary session on 8 September to push through austerity measures, but opposition parties appear poised to reject the proposal.
European bond yields climbed on the uncertainty, outperforming US yields. While EUR/USD tracked higher, the euro underperformed across other markets.
The euro’s weakness helped AUD/EUR reach three-week highs, now just 1.0% shy of a two-month peak. NZD/EUR also hit two-week highs, though the euro gained against the Singapore dollar.
Fed’s Daly hints at September rate cut; Aussie rallies
San Francisco Fed President Mary Daly said policymakers should be prepared to lower interest rates this month, suggesting recent inflation from tariffs may be temporary. In a post cited by Bloomberg, the Fed noted it may be time to “recalibrate policy to better match our economy.”
Daly added, “We won’t know that for sure for some time, but we can’t wait for complete clarity without risking the job market.”
High-beta FX responded positively, with AUD/USD climbing to a two-week high. Key support levels sit at the 21-day EMA of 0.6504 and the 100-day EMA of 0.6474. Resistance remains at 0.6600, followed by 0.6680–0.6720. RSI readings suggest the pair is currently overbought.
Yuan hits ten-month low as economic pressure mounts
China’s manufacturing sector contracted for the fifth consecutive month, with August’s official PMI at 49.4, slightly below forecasts and nearly unchanged from July. New orders and export demand remained flat, while construction and services edged up to 50.3. The composite PMI rose to 50.5.
USD/CNH is trading near a ten-month low, with Bollinger Bands indicating oversold conditions. Key resistance levels are at the 21-day EMA of 7.1632 and the 50-day EMA of 7.1766. Support lies at 7.1000. There are signs the People’s Bank of China is becoming more cautious about the pace of yuan appreciation.
Aussie outperforms across markets
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 31 August – 5 September
All times AEST
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
