Dollar holds firm as tension eases
De-escalation in US-Iran tensions remained the primary macro driver, underpinning risk appetite. Progress was signalled toward a potential peace deal, while Iran indicated it would halt further strikes, warning of harsher retaliation should Israel re-escalate. The Strait of Hormuz blockade remains in place pending a final agreement.
US stocks rebounded after Friday’s sharp selloff, led by tech and semiconductors (NDX +1%, SPX +0.3%).
USD traded rangebound in the NY session, holding below Friday and overnight highs.
The overnight UST rally faded into the NY session, with minor bear steepening — front-end 5s +1.5bp to 4.28% and long-dated 30s +3.5bp to 5.03%.
NY Fed one-year inflation expectations fell to 3.46%, undershooting forecasts.
Crude dropped sharply on Iran’s pledge to halt strikes and calls for an immediate ceasefire, with WTI and Brent at $91 and $94.
Gold and silver firmed after Friday’s selloff, though gold closed below its 200-day moving average for the first time since September 2023.
Overnight, AUD/USD was flat and NZD/USD was up 0.2%, while USD/SGD down 0.2% and USD/CNH was flat.
Japan growth softens but outlook stays steady
Japan’s Q1 real GDP growth slowed to an annualised 1.8%, revised down from the initial 2.1% reading. Businesses cut capital spending by 0.7% q/q, a sharp turn from the 0.3% gain first estimated, after fresh plant and equipment figures landed following the preliminary release. Private consumption and external demand held steady from the earlier data. Even at the softer pace, the economy still looks resilient, and we expect the BoJ to lift rates next week.
USD/JPY has now breached the key 160.00 mark, now sitting roughly 0.3% below its 30 April peak of 160.7200. The 21-day EMA near 159.40 and the 50-day EMA at 158.84 should cushion any pullbacks, while 160.72 stands as the level to clear.
Trump leans on the Fed to cut
US President Trump told Meet the Press the the Fed should be cutting rates. He argued the US should not be punished by a central bank quick to tighten, pointing out the country was built on the back of low rates. Instead of raising, he said, “we should actually lower interest rates.” He described the US as “doing great” and complained the Fed reaches for hikes precisely when the economy hums along, when it should be doing the opposite.
In Asia, USD/SGD trades around 2.4% above its 28 January low of 1.2586. Support sits near the 21-day average at 1.2808, with the 100-day average close behind at 1.2789. The pair is now trading near the top end one-month trading range.
USD buyers may look to take advantage at the key support levels.
AUD/USD still near oversold levels
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 8 – 12 June
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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.
