China hits back
The Australian dollar led major markets lower overnight as China escalated trade tensions with the US.
China announced new sanctions on US units of South Korean shipping group Hanwha Ocean.
The AUD/USD fell as much as 1.0% to hit seven-week lows before rebounding to close down 0.4%.
The NZD/USD was less impacted with the pair down 0.2%.
In Asia, the USD/JPY fell 0.3% while USD/CNH was steady.
The USD/SGD was flat after the Monetary Authority of Singapore kept policy steady.
Fed’s job conundrum
Federal Reserve chair Jerome Powell spoke overnight and outlined the increasing complexity of policy making.
Powell said the impact of tariffs is continuing to flow through into inflation. Powell warned the slower than expected flow-through means inflation might be more persistent.
But Powell also said the job market is weakening and falling job openings are likely to show up as job losses.
That said, Powell left the door open for further cuts, causing the USD to weaken after his comments.
Aussie slips further into downtrend
The Aussie was helped by the late session rally overnight but continues to slip further into a short term downtrend.
The AUD/USD hit seven-week lows yesterday and is now clearly below the 8- and 21-day moving averages — traditionally a sign of downward momentum.
On Thursday, Australian monthly employment for September is released with markets looking for around 20k new jobs after last month’s surprise negative reading.
Aussie leads losses
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 13 – 18 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.
