Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Aussie underperforms on trade worries
The Australian dollar was one of the biggest losers overnight as worries about global trade, driven by last week’s election win for Donald Trump, drove markets.
Most recently, a series of appointments by Trump, including Mike Waltz as national Security Adviser, signalled a likely hardline approach to international relations.
The AUD/USD dropped 0.7% and slipped to three-month lows.
The NZD/USD also fell 0.7%, while the USD/SGD gained 0.4% and USD/CNH climbed 0.3% to hit three-month highs.
The Aussie will remain in focus over the next 48 hours with wage price data due on Wednesday and the October jobs result due on Thursday.
US CPI in focus
US Senior Loan Officer Opinion Survey (SLOOS), a closely watched measure of bank lending activity, was released overnight.
The rate of business loan tightening has slowed down further, according to the October Senior Loan Officer Opinion Survey.
However, broader US activity remains upbeat despite the slowdown in lending, with a pick-up in inflation expected tonight.
US inflation is due at 12.30am AEDT with headline annual inflation expected to climb from 2.4% last month to 2.6% in October. The core number is expected to stay steady at 3.3%.
Korea jobs data key for KRW
Korea unemployment rate will be released today. Due to an increase in the labor supply, we anticipate that the unemployment rate will have slightly increased from 2.5% in September to 2.6% SA in October.
Since job losses in the manufacturing sector were probably compensated by strong employment gains in the service sector, the hiring rate probably stayed the same.
While the manufacturing sector probably continued to reduce employment due to continuing restructuring across key conglomerates, including Samsung Group, we anticipate that the tourist and public health sectors will have created positions in response to seasonally strong demand.
Asia FX has mostly underperformed on worries about global trade. The USD/KRW is nearing the all-time highs of 1404.47 reached on 7 Nov.
Aussie feels the pressure
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 11 – 16 November
Have a question? [email protected]
*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.
