Aussie reverses after strong run
The Australian dollar was hit by the speed wobbles overnight, briefly touching a new three‑year high before reversing sharply to finish flat in a 1.8% trading range—almost three times the daily average move.
AUD/USD has surged since breaking above 0.7000 this week, after higher‑than‑expected inflation data fuelled expectations of a potential rate hike from the Reserve Bank of Australia at its meeting next week.
The NZD/USD also saw above‑average volatility, with the pair reversing near seven‑month highs around 0.6100.
We saw similar moves in precious metals markets with gold and silver also reversing from highs overnight.
LDP set to tighten grip as Japanese yen pulls back
Local media and overnight polls indicate that Japan’s Liberal Democratic Party is on track to secure a majority in the snap election, while the new centrist party continues to struggle for traction.
This outcome could support sentiment around Japanese equities.
The yen has eased, with USD/JPY correcting 4% from its recent peak of 159.45 on January 14.
Key levels to watch include the 100‑day EMA at 154.16, followed by the 50‑day EMA at 155.79, which may act as near‑term resistance.
Singapore central bank turns hawkish as USD rebounds
Singapore’s central bank left its policy stance unchanged in January but adopted a more hawkish tone compared with October. It raised its 2026 inflation forecasts for both core and headline prices to 1.0–2.0% (from 0.5–1.5% previously) and struck a more optimistic note on growth. The bank now expects activity to remain resilient this year, with output staying above trend rather than easing.
Risks have shifted to the upside, with officials highlighting demand‑driven inflation, faster wage growth, and potential increases in import costs if supply shocks emerge. They also noted the recent strength of the Singapore dollar.
USD/SGD has bounced off recent lows of 1.2586, last seen on January 28.
The next key resistance levels are the 21‑day EMA at 1.2782, followed by the 50‑day EMA at 1.2849.
USD buyers may look to take advantage now.
Gold, silver reverse and drag Aussie lower
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 26 – 31 Jan
All times AEDT
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