Aussie approaches 2025 highs
Global markets continued to react to last Friday’s poor US jobs report with hopes for a series of Federal Reserve rate cuts boosting sentiment around the world.
All three major US sharemarket indexes were higher with the Dow Jones up 0.3% and the tech-focused Nasdaq up 0.4%.
In FX markets, the Australian and NZ dollars were the best performers with the AUD/USD up 0.5% and closing at the second-highest level for the year.
The NZD/USD was up 0.8% to the highest level in a month.
In Europe, the euro shook-off worries about political instability after French Prime Minister Francois Bayrou lost a “no confidence” vote driven by plans for an austerity-style package to reduce spending. The euro was higher in most markets.
The USD/CNH and USD/SGD both fell 0.1%.
Fed signals mixed messages
Chicago Fed President, Austan Goolsbee told Bloomberg TV that job growth is lagging, but he’s still undecided on a rate cut in September.
He suggested immigration might be skewing hiring data and emphasized the importance of Fed independence in keeping inflation in check.
Despite the uncertainty, traders are betting on nearly three rate cuts by the end of 2025.
Meanwhile, AUD/USD is inching toward the 0.6600 mark, a level that’s proving tough to crack.
If momentum fades, watch for support around 21-day EMA of 0.6519 and 50-day EMA of 0.6507.
Yen drifts lower as Japan braces for leadership shake-up
Japanese Prime Minister Ishiba resigned on Sunday, setting the stage for a likely LDP presidential election on October 4. Attention now shifts to the front-runners: Sanae Takaichi and Shinjiro Koizumi.
Koizumi is expected to maintain the current course, while Takaichi leans toward stimulus, signaling a more dovish stance.
Political uncertainty has nudged USD/JPY higher, as a leadership transition could stall the Bank of Japan’s rate hike plans.
Traders now expect a rate hike in April 2026 instead.
USD/JPY is holding above key support levels of 21-day EMA of 147.69 and 50-day EMA of 147.25 next.
On the upside, 150.00 remains a key psychological barrier to break.
Aussie, kiwi outperform
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 8 – 13 September
All times AEST
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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 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.
