Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Gold, silver surge overnight
The Australian dollar was the best-performing currency overnight as precious metals extended recent gains with silver at 12-year highs and gold hitting new all-time highs.
The previous metals space has been supported by geopolitical tensions in the Middle East, uncertainty ahead of the US presidential election and a pick-up in inflation expectations as seen by an increase in global bond yields.
The AUD/USD led gains as it climbed 0.3%. The Aussie was higher in most other markets.
The NZD/USD gained 0.2% with the kiwi also stronger in other markets.
In Asia, the USD/JPY outperformed, climbing to three-month highs. The USD/SGD and USD/CNH were broadly steady
Euro lower on ECB cut expectations
EUR/USD neared three-month lows overnight and markets remain more convinced of further European Central Bank rate cuts, as shown in the chart.
The euro has been weaker in other markets with the AUD/EUR near 15-month highs and EUR/SGD near 18-month lows.
The EUR consumer confidence report is scheduled to be released at 1:00am AEDT on Thursday.
We anticipate that consumer confidence in the euro region EU consumer confidence to -12.1 from -12.9 in September.
This is supported by the increase in share prices, the decline in gasoline costs, and the improvement in the October Sentix poll.
USD/JPY shows signs of trend extension above 150
USD/JPY is currently at three-month highs, but it may have slight room to run higher given our expectation for lower Tokyo core CPI this Friday.
After rising from significant support around 140, the USD/JPY rise has slowed down as it approaches expected resistance levels around the 150- and 151-handles.
This Friday at 10:30am AEDT, the Tokyo CPI for October 2024 will be revealed. We’re looking for 1.8% year-over-year inflation in the Tokyo core CPI in October 2024, which is a decrease from 2.0% in September.
Aussie stronger, notably in the crosses
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 21 – 26 October
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.
