Greenback drops on coordinated action
The US dollar was lower across Asia on Friday morning after the Bank of Japan intervened in FX markets, driving the biggest one-day loss in USD/JPY in two years.
The move triggered broad US dollar losses, with AUD/USD jumping 1.0% and returning to six-week highs.
The kiwi posted even bigger gains, with NZD/USD rising 1.4% as the pair hit its highest level since 5 June.
USD/SGD fell 0.6%, dropping back to one-month lows.
USD/CNH fell 0.2%, with the pair breaking below 6.75 for the first time in three years.
The Bank of Japan appears to have intervened in FX markets at the start of New York trading overnight, with reports of coordinated action as US authorities also performed a so-called “rate check”.
The Bank of Japan meets later today and is expected to keep Japanese interest rates on hold.
Aussie at one-month highs as RBA maintains inflation focus
RBA Assistant Governor Sarah Hunter said Australia’s labour market still shows signs of residual tightness, while softer consumer confidence has yet to translate into a meaningful slowdown in spending.
Hunter also reiterated that the Board remains alert to the risk of inflation expectations becoming entrenched, although she declined to provide guidance on the August meeting.
Oil rebounds on renewed Middle East tensions
Brent crude climbed back to US$89 per barrel after renewed Middle East tensions triggered a rebound from its earlier decline to US$83.
Supporting prices, US crude inventories fell by 11 million barrels last week, exports increased modestly, and production remained unchanged.
Any further escalation in regional tensions could heighten energy price volatility and add pressure to consumer fuel costs.
USD tumbles after BoJ move
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 27 – 31 July
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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.
