US dollar reaches fresh 18-month highs
The US dollar remains the strongest major currency, reaching fresh 18-month highs overnight.
The greenback gained even as US technology stocks weakened, with the tech-focused Nasdaq falling 0.7% ahead of the start of the US third-quarter earnings season. Other major equity indices were broadly steady, with the Dow Jones and S&P 500 little changed.
In currency markets, the US dollar’s biggest gains were against the Swiss franc, with USD/CHF rising 0.6%.
AUD/USD fell 0.4%, while NZD/USD lost 0.6%.
Energy risks support AUD/EUR
Russian attacks on Ukrainian energy facilities continued over the weekend despite US President Donald Trump’s announcement of an immediate halt to strikes on energy infrastructure. Ukrainian President Volodymyr Zelenskyy said Kyiv supports the proposal but is awaiting further details, while Moscow has yet to formally confirm any agreement.
Concerns that further disruption to energy infrastructure could lift energy prices have weighed on the euro and supported the Australian dollar. As a result, AUD/EUR has climbed to a two-year high near 0.6230, offering Australian businesses with upcoming euro payment obligations some of the most favourable conversion levels seen in two years.
Support is located at the 21-day EMA of 0.6193 and the 50-day EMA of 0.6170, while resistance is seen at the key psychological level of 0.6250.
Against the US dollar, AUD/USD remains under pressure but continues to hold above key support at 0.6900. Initial resistance is located at the 21-day EMA of 0.7019, followed by the 100-day EMA at 0.7049.
China pushes yuan funding beyond its borders
China is giving overseas borrowers greater access to low-cost yuan funding as it advances efforts to expand the currency’s global reach. Regulators have approved offshore use of proceeds from more than 40% of panda bonds issued this year, with foreign borrowers raising CNY115.5 billion through 8 October. The policy shift supports Beijing’s broader goal of increasing the yuan’s role in trade, investment and financing by making cross-border transactions easier.
As overseas demand for yuan funding grows, the currency’s international presence continues to build.
Reflecting this trend, USD/CNH is holding just above its 12 October low of 6.6906. A move above the 21-day EMA at 6.7064 would bring the 50-day EMA at 6.7214 into focus as the next level to watch.
USD extends gains
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 12 – 17 October
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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.
