Aussie, kiwi pressured after USD rebound
The Australian and New Zealand dollars both remained pressured overnight after the US dollar staged a recovery on Friday, while major announcements are due in both markets.
The US dollar was boosted last week after Federal Reserve Chair Kevin Warsh said the Fed might need to raise interest rates when it meets in two weeks.
AUD/USD was flat on Monday ahead of key June quarter GDP numbers due on Wednesday at 11:30am AEST.
Meanwhile, NZD/USD remains near two-week lows ahead of a likely Reserve Bank of New Zealand rate hike on Wednesday.
Bessent looks to BoJ to support Japanese yen
US Treasury Secretary Scott Bessent said recent yen weakness remains well contained and does not resemble the disorderly moves that prompted rare joint intervention by Japan and the US last month.
Speaking to Reuters, he expressed confidence that BoJ Governor Kazuo Ueda would take the appropriate policy steps with the support of Prime Minister Sanae Takaichi. Bessent also suggested Japan may have moved beyond the reflation-driven policies associated with Abenomics.
In other regional currency markets, USD/SGD is trading about 1% above its 28 January low of 1.2586. Initial resistance is seen at the 21-day EMA of 1.2764, followed by the 50-day EMA at 1.2809.
On the downside, 1.2700 remains the next key support level. Meanwhile, EUR/SGD is near a three-week low, while SGD/JPY has climbed to a one-month high.
China factory activity shows improvement
China’s official manufacturing PMI rose to 49.8 in August, beating expectations of 49.5 and improving from 49.2 in July. While activity remained below the growth threshold for a second month, demand showed signs of recovery, with both new orders and export orders returning to growth.
Challenges remain, particularly among small and medium-sized businesses, hiring, inventory levels and parts of the traditional manufacturing sector. Elsewhere, the non-manufacturing PMI held steady at 49.0, missing forecasts of 49.4 and highlighting subdued domestic demand. The composite PMI output index inched up to 49.5 from 49.3.
USD/CNH remains near a three-year low. A move above the 21-day EMA at 6.7366 could open the door to the 50-day EMA at 6.7564. On the downside, psychological support stands at 6.7200.
Aussie, kiwi remain pressured
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 31 August to 4 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.
