Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Geopolitics hits APAC FX
Global markets fell again overnight as markets worried the US might take military action in the Middle East with hostilities between Israel and Iran continuing. Israel said it launched new strikes on Wednesday morning (APAC time).
US president Donald Trump called for Iran’s “unconditional surrender” on Tuesday after he left this week’s G7 meeting in Canada early to return to Washington DC as tensions escalate.
Key markets were lower with the S&P 500 down 0.8% and the Nasdaq down 0.9%. Crude oil surged 4.5% although gold was largely unchanged.
In FX markets, the greenback jumped as it reclaimed some of its “safe haven” status. The British pound was the hardest hit, with the GBP/USD down 1.1%, with the GBP recently stronger thanks to more speculative activity.
The Aussie and kiwi both fell sharply, with the AUD/USD and NZD/USD each falling 0.8%, while the USD/SGD and USD/CNH both climbed from recent lows. Away from geopolitics, markets are focused on tonight’s US Federal Reserve meeting. The Fed is expected to hold rates steady. The decision is due at 4.00am AEST.
Japanese yen mostly higher as BOJ holds rates
On Tuesday, the Bank of Japan kept its policy rate unchanged at 0.5%, in line with expectations.
It plans to slow the pace of its balance sheet reduction, trimming quantitative tightening (QT) by JPY 200 billion per quarter starting April 2026.
The BoJ also signaled flexibility in its bond purchase strategy, indicating potential adjustments at policy meetings if needed.
The Japanese yen fell versus the US dollar but gained versus most other currencies on safe haven flows.
On the charts, USD/JPY briefly pierced the key 145.00 mark before retreating post BOJ rate decision. The next resistance levels stand at 144.28 (21-day EMA) and 144.99 (50-day EMA).
The AUD/JPY and SGD/JPY both eased from one-month highs while NZD/JPY eased from five-month lows.
SGD defies odds as exports stumble
Singapore’s non-oil domestic exports (NODX) unexpectedly dropped 3.5% in May, defying forecasts of 8% growth.
This follows a strong 12.4% surge in April but was weighed down by weaker electronic and non-electronic shipments.
U.S.-bound exports took a heavy hit, plunging 20.6% amid escalating trade tensions.
Overall trade growth slowed to 1% in May, down from 14.7% in April. Exports edged up 2.5%, while imports dipped 0.5%.
The chart below highlights the Singapore dollar’s outperformance in Asian markets since 2000, cementing its regional safe-haven reputation.
Key resistance levels for USD/SGD stand at 1.2876 (21-day EMA) and 1.2992 (50-day EMA).
Aussie, kiwi lower
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 16 – 21 May
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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.
