Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Tariff tensions grip markets as USD stands resilient
The US revealed tariff rates for several countries, with local market losses remaining limited as negotiation room persists ahead of implementation.
Japan and South Korea face 25% tariffs effective August 1, explaining modest JPY overnight weakness.
The European Union will not receive a tariff letter from the US, helping EUR/USD to rebound back, but still 1% away from recent highs of 1.1829.
Note the changes in Asia EM tariff rates: Thailand 36% (unchanged), Indonesia 32% (unchanged), Malaysia 25% (up from 24%), Cambodia 36% (down from 49%), and Bangladesh 35% (down from 37%).
US risk assets declined with SPX (-0.80%) and NDX (-0.90%) closing in the red, on risk-off sentiment.
USD/SGD gains 0.44% overnight, while Antipodeans AUD/USD fell 1% and NZD/USD fell 1.1%.
Fed tug-of-war nudges USD/SGD higher
US Treasury Secretary Scott Bessent stirred the rate debate this week, subtly shifting the focus. Speaking on CNN and CNBC, he reminded viewers that it’s the full Federal Open Market Committee—not just its chair—that decides where rates go.
He suggested traders might be mispricing expectations based on political pressure from President Trump.
Bessent predicts two rate cuts before year-end, a stance he described as broadly accepted.
Looking at APAC FX, USD/SGD has bounced back, as flagged in recent APAC updates.
Dollar buyers may see fresh momentum here, with resistance looming at the 21-day EMA of 1.2799 and the 50-day EMA of 1.2897.
RBA may lean tough after expected cut
The Reserve Bank of Australia is set to make its first back-to-back rate cut of the cycle today—a shift from earlier expectations for action in August.
With inflation hovering inside target and market bets aligned at 24 basis points after May’s dovish tone, a cut today seems likely.
But what happens next may matter more.
As the RBA sharpens its message, expect stronger language to show it’s still driven by data and that current policy is far less tight than it was at the start of the year.
AUD/USD has edged down toward its 50-day EMA of 0.6473.
If the rate decision comes in as expected, buyers may eye the psychological support near 0.6400 as a potential re-entry point.
All eyes on RBA rate decision today
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 7 – 12 July
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.
