Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Dollar rally resumes on solid data and technical breakout
The USD index broke above its 100-day moving average for the first time since March.
Initial jobless claims fell to 218k from 231k prior, while Q2 GDP was revised higher to 3.8%, undermining the soft labor narrative. USD/JPY traded just shy of 150 as rate volatility provided additional support for the dollar against low-yielders.
GBP underperformed significantly with 10-year gilts selling off 9bp after leadership speculation raised concerns over potential borrowing increases.
A senior Fed official argued for replacing the federal funds rate as the policy benchmark, suggesting the tri-party general collateral rate as an alternative. While this wouldn’t materially change monetary policy conduct, it could shift focus toward repo/SOFR markets.
US equities closed down 1% with the S&P 500 breaking support at 6670. Investor AI fatigue continues alongside mounting geopolitical tensions.
Fed signals discomfort with sticky inflation; USD/SGD eyes 1.3000
Chicago Fed President Austan Goolsbee warned that keeping interest rates steady while inflation creeps higher is effectively the same as cutting them. He made it clear the Fed isn’t comfortable with inflation hovering in the mid-2% range and doesn’t believe its ripple effects are being felt yet.
In Asia, the Singapore dollar is under pressure. USD/SGD has broken above its 100-day moving average and is now flirting with the key 1.3000 level. But with the pair sitting at the top of its one-month range, dollar buyers may wait for a dip before jumping in.
BOJ keeps close watch on tariffs as USD/JPY flirts with 150
Japan’s central bank remains cautious. In its July meeting minutes, BoJ officials flagged ongoing uncertainty in the US, EU, and China. While Japan’s economy is recovering—thanks to stronger corporate profits, rising employment, and steady income—many members stressed the need to closely monitor how US tariffs could affect growth and prices.
One member suggested it may take another 2–3 months to fully gauge the fallout. If Japan and the US prove resilient, the BoJ could shift away from its wait-and-see stance by late 2025.
Inflation is inching closer to the 2% target, but it’s not there yet. Services PPI for August rose 2.7%, slightly below the 2.9% forecast.
In FX, USD/JPY is testing the psychological 150.00 level. Support sits at 148.04 (21-day moving average) and 147.56 (50-day).
Aussie slumps on dollar strength
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 22 – 27 September
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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.
