Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
“Possible” trade deal sends Aussie, kiwi higher
APAC FX markets jumped higher on Thursday after US president Donald Trump said a trade deal with China was “possible”.
Speaking on Air Force One, Trump only briefly commented on the potential for a deal, but regional markets gained quickly on the news.
The Australian dollar gained strongly, up 0.9% yesterday, also boosted by the stronger than expected jobs number. The Australian jobs market gained by 44k new jobs in January, above forecasts for 20k, with the unemployment rate climbing from 4.0% to 4.1%.
The AUD/USD reached the highest level in two months. The Aussie was higher in other markets with the AUD/EUR also at two-month highs.
The kiwi outperformed, despite this week’s jumbo rate cut, with the NZD/USD up 1.1% and trading to the best level since 17 December.
USD/SGD plunges to three-month lows
In Asia, the Singapore dollar and Japanese yen were the best performers.
The USD/SGD fell back to the lowest level since 12 November with the Singapore dollar boosted by the strong budget surplus announced in this week’s fiscal 2024 government budget. The USD/SGD fell 0.8%.
The USD/JPY fell 1.2% as this market dropped to two-month lows with the US dollar lower across Asia.
The USD/CNH fell 0.6% with the USD at the lowest level since 29 November.
PMI numbers in focus
Looking forward, the focus is on the rolling sequence of PMI numbers which will provide the most up-to-date reading of the global economy.
The purchasing manager index (PMI) numbers provide an insight into initial stock orders from both manufacturing and service businesses and are therefore seen as a key leading indicator of future economic growth.
Australian PMI numbers are due at 9.00am, Japanese numbers at 11.30am, European PMIs are released at 8.00pm and the US numbers are due at 1.45am (AEDT).
Also today, Reserve Bank of Australia governor Michele Bullock speaks at 9.30am while US president Donald Trump speaks at the Republican Governors Association at 11.20am (AEDT).
Aussie hits top of recent range, USD/SGD at the bottom
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 17 – 22 February
All times AEDT
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.
