Fed holds rates
The US dollar rebounded from four‑year lows overnight after the Federal Reserve kept interest rates on hold.
The USD was supported as Fed Chair Jerome Powell struck a more positive tone on the US labour market, with markets now no longer expecting a rate cut in the first half of this year.
The dollar also firmed after US Treasury Secretary Scott Bessent said the US is “absolutely not” intervening to lower USD/JPY. The USD had been under pressure this week after “rate checks” from the Fed and Bank of Japan fuelled speculation about possible intervention.
USD/JPY bounced from three‑month lows, while USD/SGD and USD/CNH also climbed off recent lows.
RBA in focus as inflation bites
Headline CPI rose 1.0% month‑on‑month in December, pushing annual inflation up to 3.8%, above the consensus forecast of 3.6%.
With inflation proving sticky and underlying annualised inflation still above target, the RBA is likely to maintain a cautious stance. A rate hike at the February meeting appears unlikely unless the data delivers a significant upside surprise; however, if these sticky inflation trends persist, further tightening in the coming quarters cannot be ruled out.
AUD/USD recently touched a high of 0.7023 on 28 January.
Key support levels sit at the 21‑day EMA (0.6790) and the 50‑day EMA (0.6702).
New Zealand budget set to tighten purse strings
New Zealand will deliver Budget 2026 on 28 May, with Finance Minister Nicola Willis pledging strict cost control and targeted investment. She told Parliament the plan will prioritise healthcare, education, defence capability, and law and order, while keeping a firm lid on discretionary spending.
With an operating allowance of just NZD 2.4 billion and minimal unallocated funding, most agencies will need to absorb rising costs through internal savings. Willis emphasised that there would be “no splashing the cash”, aligning with the government’s focus on restoring fiscal discipline, sustaining tax relief for households and businesses, and keeping public finances on track. A conservative budget looms ahead of the 7 November election.
NZD/USD has strengthened in recent weeks. The next support levels sit near the 21‑day average (0.5860) and the 50‑day average (0.5810).
Aussie leads gains
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 26 – 31 Jan
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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.
