US tech stocks nearing correction levels
The US technology sell-off worsened overnight, with the tech-focused Nasdaq dropping 2.2%, leaving the index now down 6.2% from recent highs. A drop of 10% is seen as a “correction”.
In FX, the Aussie was the hardest hit, down 1.2% as it plunged below key support at 0.7000. The NZD/USD fell 0.8%.
In Asia, the US dollar extended gains, with the USD index now well above one-year highs. The USD/JPY pushed higher, with the pair well above the former intervention level of 160.00. USD/CNH gained 0.3%, while USD/SGD gained 0.2%.
AUD lower as PMI details signal weakness; CPI due
The Aussie was also pressured by some poor news in the details of yesterday’s purchasing managers’ index (PMI) numbers.
Australia’s flash composite PMI climbed to 49.8 in June from 48.7. Manufacturing strengthened to 51.2 from 50.7, while services improved to 49.9. Activity is close to the 50 level that separates contraction from growth, but momentum still looks fragile.
New orders continued to fall as uncertainty lingered, and business confidence slipped to its lowest level since the pandemic. Price pressures eased from April highs, though costs remain elevated.
Looking forward, today’s CPI numbers, due at 11.30am AEST, will be key.
AUD/USD sits at a two-month low, about 4% below its 6 May peak of 0.7278.
Near term, resistance stands around the 100-day moving average at 0.7036, followed by the 21-day moving average near 0.7064. On the downside, 0.6900 remains key support.
China, Hong Kong push broader access as yuan stays firm
Hong Kong is working with Chinese authorities to widen cross-border investment access, including allowing mainland investors to participate in local IPOs.
Officials aim to expand eligibility, increase quotas, and broaden products under the Wealth Management Connect scheme.
Financial Secretary Paul Chan played down concerns over a clampdown on illegal cross-border trading, noting that mainland investors will gain access to more innovative, potentially higher-risk offerings.
USD/CNH continues to hover near a three-year low, about 0.4% above the 17 June trough of 6.7539. A break above the 50-day EMA at 6.8013 is needed to build upward momentum.
If that holds, the pair could move toward the 100-day EMA at 6.8475.
Elsewhere, AUD/CNH trades at a three-month low.
Aussie drops under 0.7000
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 22-27 June
Have a question? [email protected]
*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.
