US shares lower on valuation worries
Global markets were mostly lower on Tuesday, with US sharemarkets hit by concerns about technology valuations.
The US’s tech‑focused Nasdaq fell for the third time in four sessions, with uncertainty around the path of US rate cuts – following the nomination of Kevin Warsh for Federal Reserve chair – also weighing on sentiment.
The S&P 500 fell 0.8% while the Nasdaq lost 1.4%.
The US dollar was mostly lower, with the Aussie and kiwi the strongest performers following yesterday’s Australian rate hike.
Aussie surges after RBA hike
The Reserve Bank of Australia’s decision to raise the cash rate by 25 basis points to 3.85% yesterday was widely anticipated, with markets pricing in a 75% probability ahead of the meeting.
The statement accompanying the decision was notably hawkish, confirming that inflationary pressures picked up materially in the second half of 2025 and are expected to remain above target for some time.
The RBA’s updated forecasts reflect this persistence, with core inflation projections raised by 0.5 percentage points and the unemployment rate forecast lowered by 0.1 percentage points.
Importantly, these projections are based on an assumed year‑end cash rate of 4.2%, implying the Board sees scope for up to two additional hikes this year if inflation does not moderate as expected.
AUD/USD has surged following the RBA decision, with the pair up 1.0% on the day and now 5.0% higher since 19 January.
US shutdown fight keeps markets edgy
House Speaker Mike Johnson is racing to pass a US$1.2 trillion spending package as soon as Tuesday to keep much of the federal government funded through the fiscal year. The deal, already cleared by the Senate, gives the Department of Homeland Security only two weeks of funding to allow further negotiations on tougher immigration enforcement.
President Trump has urged House Republicans to support the Senate’s bipartisan plan, but obstacles remain. Democrats are expected to block the procedural rule vote, while conservative Republicans want to attach the SAVE Act voter ID measure. Senate Minority Leader Chuck Schumer has warned that adding it would be a “poison pill” that would sink the bill. Any House amendments would send the package back to the Senate, delaying resolution.
In Asia FX, USD/SGD has climbed 1% above its recent low of 1.2586, last seen on 28 January. The next resistance sits at the 21‑day EMA of 1.2765, followed by the 50‑day EMA of 1.2834.
For AUD/USD, the next key support lies at the 21‑day EMA of 0.6857, followed by the 50‑day EMA of 0.6747.
USD/CNH continued to decline, with the pair at its lowest level since May 2023.
Aussie back near highs
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 3 – 7 Feb
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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.
