Greenback climbs to two-month high
The US dollar extended its recent rally overnight, buoyed by weakness in its two largest peers — the euro and Japanese yen.
Political uncertainty weighed on both currencies. The euro slipped after the resignation of French Prime Minister Sebastian Lecornu, pushing EUR/USD to a two-month low and lifting AUD/EUR to a four-month high.
Meanwhile, the Japanese yen dropped to an eight-month low against the greenback following Sanae Takaichi’s victory in the LDP leadership race. Takaichi, a proponent of low interest rates, is poised to become Japan’s first female prime minister. The AUD/JPY surged to an 11-month high, while SGD/JPY hit a 15-month peak.
The political moves saw the US dollar benefit from its relative political stability – a remarkable outcome considering the current US government shutdown.
The stronger US dollar saw the AUD/USD fall 0.5% and the underperforming NZD/USD, post this week’s 50-bps rate cut, fall 0.7%.
Trump announces Israel-Hamas peace breakthrough
President Donald Trump announced that Israel and Hamas have agreed to the first phase of his peace plan to end the war in Gaza, following negotiations in Egypt. The news triggered a pullback in gold after its recent rally.
“I am very proud to announce that Israel and Hamas have both signed off on the first phase of our peace plan,” Trump posted on Truth Social. “This means that all hostages will be released very soon, and Israel will withdraw its troops to an agreed line—marking the first steps toward a strong, lasting peace.”
USD/SGD neared the upper end of its recent range, now trading 1.9% above its July low of 1.2698. Traders are watching support near the 21-day EMA at 1.2889 and the 50-day EMA at 1.2871.
China tightens rare earth rules ahead of Xi-Trump talks
Beijing has expanded its rare earth export restrictions to include products manufactured overseas using Chinese-sourced materials, just weeks before a planned meeting between Presidents Xi Jinping and Donald Trump.
According to China’s Ministry of Commerce, foreign exporters will now require licenses to ship goods containing Chinese rare earths. The move adds fresh tension to already delicate trade negotiations, with implications for key sectors like automotive and defense. USD/CNH slipped below a key short-term support level, pausing its recent climb. The next resistance levels are the 50-day EMA at 7.1450 and the 100-day EMA at 7.1663
Greenback at two-month highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 6 – 11 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.
