USD at six-week highs
Global markets mostly weakened overnight with US shares lower and the majority of currencies falling against the greenback.
US shares paused after a massive run since the April lows – the S&P 500 is up nearly 40%.
The greenback was also higher with the USD index up 0.5% as it reached the highest level since 27 August.
The USD’s best gains were across the APAC region with the USD/JPY up 1.0% as markets continued to react to Sanae Takaichi’s leadership win and the potential for lower Japanese interest rates.
The USD/CNH was steady while USD/SGD gained 0.1%.
The AUD/USD fell 0.5% while NZD/USD dropped 0.7% ahead of today’s key interest rate decision.
NZD/USD slips ahead of rate decision
New Zealand business confidence fell to its lowest level since December, with only 15 percent of firms expecting better conditions in Q3, down from 26 percent.
The NZIER quarterly survey showed rising inflation pressures, with 11 percent of firms raising prices while just 1 percent cut them last quarter.
Hiring and investment plans also weakened. 23%of businesses reduced staff, and many signalled lower spending on buildings and equipment.
With demand still soft, the weak survey may prompt the Reserve Bank of New Zealand to cut rates by 50 basis points today.
NZD/USD remains under pressure, but a descending channel pattern suggests potential upside if the pair breaks out. Traders are watching resistance at 0.5849 (21-day average) and 0.5885 (50-day average) for signs of a rebound.
USD/SGD tests range top after Schmid’s inflation warning
Kansas City Fed President Jeffrey Schmid pushed back on rate cuts Monday, saying policy is “appropriately calibrated” and inflation remains too high.
“The Fed must maintain its credibility on inflation,” he said, citing rising prices for durable goods and broader price pressures.
Schmid, who supported a rate cut last month amid a cooling job market, now appears more cautious. He’s closely watching alternative labour and price data and hopes the government reopens soon so official numbers can resume.
In Asia, USD/SGD is trading 1.6 percent above its July low of 1.2698. With the pair near the top of its recent range, dollar buyers may eye support around the 21-day EMA at 1.2874 and the 50-day EMA at 1.2863.
USD higher again
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
