Aussie waits for critical new CPI reading
Global markets extended their gains to a third day as investor sentiment recovered thanks to growing hopes for a third Federal Reserve rate cut next month.
The US Dow Jones index gained 1.4% overnight, and the three-day recovery has reduced recent losses from almost 6.0% from the recent highs to only 2.4%.
In FX markets, the US dollar, as measured by the USD index, fell to a one-week low as sentiment improved and markets favoured more economically sensitive currencies like the Australian dollar.
The AUD/USD gained 0.1% overnight but might be tested by today’s monthly inflation read.
Notably, today’s release is the first complete monthly reading, which sees the monthly CPI indicators overtake the quarterly in terms of precedence and importance. Previously, a partial monthly report had been released.
The report is released at 11:30 am AEDT and provides the potential for a significant unexpected move.
RBNZ set to trim rates again
The Reserve Bank of New Zealand is expected to cut the cash rate by 25 points in November, bringing it down to 2.25%.
With the bank leaning dovish and the recovery still fragile, another cut looks necessary, though not as steep as October’s surprise 50-point move.
Rates are likely to stay steady through 2026, and traders have already factored in the November cut.
The RBNZ decision is at 2.00pm NZST (12.00pm AEDT).
The kiwi faces resistance at the 21-day average of 0.5658, then the 50-day average at 0.5726.
NZD buyers may step in once the pair breaks out of its descending price channel.
SGD gains as Daly backs December cut
San Francisco Fed President Mary Daly said she supports lowering rates at next month’s meeting, warning that a sudden downturn in the job market is both more likely and harder to manage than a flare-up in inflation.
The Wall Street Journal’s Nick Timiraos noted, “Daly’s views are notable because while she doesn’t have a vote on monetary policy this year, she has rarely taken a public position at odds with Fed Chair Jerome Powell.” Powell is expected to play a central role in bridging divisions on the committee ahead of the December decision.
In Asia trading, USD/SGD remains above 1.3000, with support at the 50-day average of 1.2980.
EUR/SGD is hovering near a more-than-two-week low but still above 1.5000.
Greenback at one-week lows
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 24 – 29 November
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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.
