Aussie, kiwi turn from key market levels
Global markets turned more cautious overnight after an escalation in fighting in the Middle East, although sentiment improved after US President Donald Trump said Israel and Hezbollah would suspend attacks.
Oil jumped, with Brent crude up 4.2% to near USD95 per barrel, but US shares still managed to eke out gains, with the S&P 500 up 0.3%.
The Aussie was weaker, with AUD/USD down 0.4%, reversing from technical resistance at 0.7200.
The kiwi, more negatively correlated with oil prices, was hit harder, down 0.9%. NZD/USD turned from major resistance at 0.6000.
China’s factory engine loses pace, reflation hopes fade
China’s manufacturing sector slowed in May. The official PMI eased to 50.0 from 50.3, with both new orders (49.9) and export orders (48.6) slipping back into contraction and signalling persistent demand weakness—a worrying follow-through after soft April activity.
The Caixin manufacturing PMI also cooled, slipping to 51.8 from 52.2. Overall new orders continued to expand, though export demand softened.
Against the broader regional backdrop, the private survey flagged easing price pressures, with input and output costs both growing more slowly for the first time in months. We see this as offering little support for the reflation story at the margin.
Services told a steadier story. The non-manufacturing PMI edged up to 50.1 from 49.4, while the composite PMI firmed to 50.5 from 50.1.
USD/CNH sits just above its recent 6.7605 low from May 29. We think USD/CNH needs to clear the 21-day EMA at 6.7954 to build upside momentum, before challenging the 50-day EMA at 6.8253.
Bessent talks up Fed credibility, signals a slow turn on Iran
US Treasury Secretary Bessent said he expects the Fed to refocus on accountability, with sharper attention on credibility ahead. He added that nothing has changed regarding maintaining the US dollar as the world’s reserve currency.
On geopolitics, he flagged that any unwinding of Iran measures, including a potential blockade, would happen gradually.
Across Asia FX, we see USD/SGD trading roughly 1.6% above its 1.2586 low from 28 January, with the 21-day moving average at 1.2765 and the 50-day at 1.2763 lining up as the next resistance levels.
USD buyers may look to take advantage now, given Bessent’s comments.
Aussie, kiwi ease from highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 1 – 5 June
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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.
