Aussie climbs ahead of PCE data
The Australian dollar led gains on Thursday, with the US dollar broadly softer ahead of tonight’s key inflation report.
The US personal consumption expenditures (PCE) index—the Federal Reserve’s preferred inflation gauge—is seen as pivotal ahead of next month’s interest rate decision.
Consensus forecasts point to the headline annual PCE holding steady at 2.6%, while the core reading is expected to edge up from 2.8% in June to 2.9% in July. The data is due at 10:30pm AEST.
The Aussie was the top performer among major currencies, with AUD/USD rising 0.4% to reach a two-week high.
The greenback also weakened across Asia, with USD/SGD slipping back toward one-month lows.
Most notably, USD/CNH broke below key support at 7.1500, falling to a one-year low.
Yen strengthens as BoJ signals rate hike readiness
Bank of Japan board member Junko Nakagawa said Thursday that the upcoming September Tankan survey, due October 1, will be crucial in shaping the central bank’s economic outlook.
Nakagawa warned that uncertainty around US trade policy could impact Japan’s pricing and wage dynamics. He noted signs that rising wages may begin feeding into higher prices, but cautioned that if companies respond to tariffs by cutting costs instead of raising prices, the wage-price link could weaken.
He emphasized that the BoJ will closely monitor the data and won’t hesitate to raise interest rates if its outlook holds.
USD/JPY revisited levels near 147.00 after breaking below the 21-day EMA support at 147.52. The next key support lies at the 100-day EMA of 146.99.
Kiwi stalls as business sentiment weakens
New Zealand businesses remain under pressure, with little sign of a quick rebound, according to the latest ANZ survey released Thursday.
While sentiment saw a modest lift following the central bank’s softer tone, overall confidence barely moved in August.
Business confidence rose by 2 points, with half of firms expecting better conditions ahead. However, expectations for their own activity slipped by 2 points to 39%.
Inflation relief offered limited comfort. Only 1% of businesses reported stronger activity than a year ago, down from 6% last month, marking the weakest result since March. Hiring also declined. As ANZ noted, “the recovery will unfortunately not come soon enough for some.”
From a technical perspective, NZD/USD continues to show weak momentum. Key resistance levels are at the 21-day EMA of 0.5898 and the 100-day EMA of 0.5925.
Aussie recovers this week
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 25 – 31 August
All times AEST
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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 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.
