Aussie higher after sell-off
Global markets rebounded from last week’s lows on Friday, helped by a recovery in US bank shares causing US stockmarkets to end the week higher. The Aussie and Canadian dollars led gains in FX.
US regional banks fell last week on worries about credit health after write-offs at lenders Zions and Western Alliance, while markets were also concerned by new tariff threats on China from US president Donald Trump.
The AUD/USD rebounded from two-month lows to end Friday up 0.2% and close the week 0.1% higher.
The kiwi also recovered from last week’s losses to end Friday near breakeven for both the day and the week.
China GDP in focus
In Asia, the USD remained mostly lower, with the greenback pressured last week as US sharemarkets fell.
The USD/SGD fell from five-month highs as the key technical resistance at 1.3000 again caused the market to fail to push higher.
The USD/CNH was also lower over the last week, with the pair falling to two-week lows.
China will remain in focus this week with September-quarter GDP due today. The annualised rate is forecast to slip to 4.7% from 5.2%.
US CPI, global PMIs due
Despite the US government shutdown, the crucial September US inflation report is now set to be released on Friday – nine days later than originally scheduled. Federal Reserve commentary last week appeared mostly open for further rate cuts, and the September inflation print could disrupt the Fed’s recent messaging if it surprises to the upside.
Also this week, a batch of PMIs will be released across the eurozone, the US, and the UK. For the eurozone, reliability took a hit: the October upbeat PMI release diverged from reality, with industrial production in Germany and the broader region coming in below expectations. This suggests manufacturing will likely be a drag on Q3 GDP growth.
EUR, GBP lead gains last week
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 20 – 25 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.
