USD firms as global tensions rattle markets
US Treasuries sold off following stronger-than-expected macroeconomic data, highlighted by a 1.7% surge in headline retail sales that was largely driven by a 15.5% jump in gasoline spending.
Geopolitical uncertainty further pressured markets as US-Iran peace talks stalled and port blockades continued, causing Brent crude to peak above $101 before paring gains on news of a temporary ceasefire extension.
The US Fed Chair nominee emphasized a commitment to strict monetary policy independence, noting that while inflation is less severe, a new inflation framework and policy regime change may be necessary.
US equities closed lower under the weight of climbing energy prices and geopolitical jitters, with both the S&P and Nasdaq dropping 0.6%.
European equities fell on the weak data, with Germany’s DAX dropping 0.6% and France’s CAC losing 1.1%, though Russian oil flows to Europe are set to resume following completed pipeline repairs.
Asian markets provided a bright spot, with South Korea’s Kospi rallying 2.7% to a record close, heavily supported by its semiconductor sector.
In FX, the dollar hovered near 98.40. Overnight, AUD/USD fell 0.40%, USD/SGD rose 0.40%, and USD/CNH added 0.10%.
Kiwi confidence sinks as higher costs bite
New Zealand’s business confidence has plunged to its lowest level since mid-2024. The latest NZIER survey reveals a net 4% of companies now expect the economy to worsen over the next six months, completely erasing the optimism seen earlier this year.
The conflict in Iran is driving up costs and squeezing profits. The data highlights a tough environment: a net 20% of firms recently saw profits drop, while 45% face rising costs prompting 43% to plan their own price hikes. Companies are also pulling back, with 9% shrinking their workforce and many cutting investments in equipment and buildings.
In FX, NZD/USD was the only major currency to post gains overnight, edging up 0.05% against the USD.
The next key support for NZD/USD lies at 100-day EMA of 0.5856, followed by 21-day EMA of 0.5851.
Conversely, key resistance will be psychological handle of 0.6000.
Xi calls for calm in the Middle East
Chinese President Xi Jinping finally broke his silence on the Middle East conflict. Following a call with Saudi Crown Prince Mohammed bin Salman, Xi demanded an immediate ceasefire and pushed all sides to resolve the dispute through diplomacy.
Crucially for global trade, he insisted the Strait of Hormuz must remain open. He also urged Middle Eastern nations to take control of their own destinies—a clear signal suggesting they should step away from their long-standing reliance on the US.
In Asian FX, USD/CNH traded near a one‑week high, while SGD/CNH and EUR/CNH hovered close to one‑week lows.
USD/CNH has climbed 0.3% from its recent low of 6.8059, last seen on 14 April. The next key resistance sits at the 21-day EMA of 6.8461, followed by 50‑day EMA at 6.8786.
With momentum improving, USD buyers may look to take advantage at current levels, as noted previously.
Aussie corrects from an overbought RSI signal
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 20 – 25 April
All times AEST
Have a question? [email protected]
*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.
