Global markets rebound as oil drops
Global sentiment mostly improved overnight as the oil price slipped on hopes that oil tankers might soon be able to move through the Strait of Hormuz. Crude oil fell 4.8%.
The US dollar slipped as its safe-haven appeal dimmed thanks to the recovery in major share markets. The Dow Jones gained 1.0% while the tech-focused Nasdaq climbed 1.2%.
The kiwi led the gains, with NZD/USD up 1.5%. The Aussie also gained more than 1.0%.
EUR/USD rose 0.8% while GBP/USD climbed 0.7%. In Asia, USD/JPY fell 0.4%. USD/CNH lost 0.3%, while USD/SGD fell 0.4%.
Aussie higher ahead of likely RBA hike
The Reserve Bank of Australia looks likely to raise rates by 25bps today. The Australian bond market currently reflects a 62% chance of a rate hike at the time of writing.
Inflation remains stubborn, with trimmed mean CPI up 3.4% annually in January and headline inflation likely to hit 5%.
Unemployment fell to 4.1%, below the RBA’s 4.6% estimate for neutral. The RBA’s Hauser recently stressed the need to act if inflation pressures persist. With GDP growth at 2.6% and job ads up 3.2% in February, delaying action could risk inflation expectations becoming unanchored. A proactive move now aims to safeguard credibility and avoid tougher choices later.
AUD/USD gained 1.3% overnight, with a sharp increase in volatility. AUD volatility hit an 11-month high, according to Bloomberg, ahead of the RBA decision.
On the downside, the pair finds its first buffer near the 50-day average at 0.6965, with another cushion around the 100-day average at 0.6840.
On the upside, the next resistance level sits near the 21-day average at 0.7050.
China’s economy picks up speed
China’s economy kicked off 2026 with stronger momentum than expected. Factories ramped up production, pushing industrial output up 6.3% year on year, well above forecasts.
Shoppers also opened their wallets, with retail sales rising 2.8% in the first two months of the year, beating expectations.
Investment in new projects grew by 1.8%, a sharp turnaround from the decline many had predicted. Even the troubled property sector showed signs of stabilisation: property investment fell 11.1%, but that was far less than the steep drop anticipated.
China’s statistics bureau called this a solid start to the year, though it cautioned that global tensions could still pose risks.
USD/CNH has bounced back over the past few days. The pair now trades more than 1% above its recent low of 6.8267, last seen on 26 February.
The next area to watch sits near the 50-day average at 6.9271.
Beyond that, another hurdle comes in around the 100-day average at 6.9804.
AUD higher as RBA looms
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 16 – 20 March
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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.
