Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Aussie, kiwi lead gains on relief rally
Global markets rebounded on Monday with US sharemarkets higher for the first time in seven sessions.
Market sentiment was helped by hopes for a de-escalation of tensions in the Middle East.
The US’s Dow Jones gained 0.7% while the Nasdaq climbed 1.0%.
The rebound in equities saw the US dollar mostly lower with risk-sensitive currencies like the Australian and NZ dollars performing best.
The AUD/USD and NZD/USD both gained 0.5%.
That said, the US dollar remains well support, with the USD index still near six-month highs.
The USD/SGD and USD/CNH were both flat. The EUR/USD was also broadly unchanged.
Eased geopolitical concerns impacted in other markets with, most notably, gold down 2.7% in its biggest one-day loss in two years according to Forbes.
Japanese yen back in focus
The Japanese yen was back in focus after the USD/JPY was higher overnight.
The pair climbed 0.2% with the market nearing the crucial 155.00 level.
The risk of intervention has grown since the US, South Korea and Japan met last week to warn of concerns around the weakening in the JPY and KRW with the falling currencies having a significant inflationary impact on the countries.
Additionally, levels above 150.00 have historically seen Japanese authorities take action to support the JPY.
PMIs to drive short-term sentiment
Looking forward, today’s purchasing manager index numbers will be the most important release.
We’re due to receive manufacturing and services PMI numbers from Australia, Japan, France, Germany, UK and US today.
Importantly, we seen a clear improvement in manufacturing globally so far in 2024 – in line with a global economy that’s been remarkably resilient in the face of the massive sequence of rate hikes seen across the globe since 2022.
Aussie, kiwi higher in most markets
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 22 – 27 April
All times AEST
*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.
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