RBNZ cuts rates by 50bps
The New Zealand dollar plunged yesterday after the Reserve Bank of New Zealand surprised markets with a larger-than-expected 50-basis point rate cut.
NZD/USD dropped as much as 1.0% before recovering to close 0.2% lower.
The Aussie also dipped early, falling 0.3%, but rebounded to finish 0.1% higher.
The RBNZ said the economy’s mid-year slowdown, highlighted by the shock negative print in NZ’s June-quarter GDP, required decisive action. The bank also noted it remains “open to further reduction.”
AUD/NZD surged to its highest level since September 2022.
US dollar climbs as tech rally rolls on
The US dollar extended its recent gains, shrugging off concerns about the government shutdown and instead riding momentum from another strong session in US stockmarkets.
Tech led the charge, with the Nasdaq up 1.1% and the S&P 500 gaining 0.6%.
The dollar also found support from the latest Federal Reserve minutes – one of the few data releases during the shutdown. The report showed most Fed members back further cuts, though some remain concerned about inflation risks.
The USD index rose 0.3%, hitting a two-month high.
In Asia, USD/JPY climbed 0.5%, USD/SGD rose 0.2%, and USD/CNH edged up 0.1%.
AUD/EUR nears June highs amid French fracas
The euro came under pressure as markets reacted to growing political uncertainty in France following the resignation of Prime Minister Sebastian Lecornu after just 27 days – the shortest tenure for a French PM in modern history.
EUR/USD fell to six-week lows, with the euro weaker across most pairs.
AUD/EUR traded higher this week, reaching one-month highs and sitting just 0.1% below its peak from June. From here, the next topside target is the 200-day moving average at 0.5720.
EUR/SGD dropped to one-month lows, with key 8- and 21-day moving averages close to signalling a downtrend for the first time since August.
Greenback in comeback
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 6 – 11 October
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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
