USD extends recent gains
The US dollar was strongly higher overnight as the greenback’s post-Federal Reserve recovery continued.
The USD hit a three-year low before the Fed decision to lower interest rates last Thursday but has since reversed strongly higher because the US central bank was unwilling to signal further rate cuts. The USD index is now up 1.8% from last week’s lows.
Most currencies weakened against the dollar overnight. The Japanese yen led losses, with USD/JPY climbing 0.8% as the move rippled across Asia.
USD/CNH rose 0.3%, while USD/SGD gained 0.4%.
In Europe, EUR/USD fell 0.7% and GBP/USD dropped 0.6%.
CPI surprise supports Aussie dollar
Australia’s annual inflation rose to 3.0% in August, up from 2.8% in July.
Core inflation—which excludes fuel, fresh produce, and holiday travel—accelerated to 3.4% from 3.2%.
The trimmed mean measure, which smooths out volatile price moves and this month excluded the annual jump in electricity costs, eased slightly to 2.6% from 2.7%.
The Aussie dollar edged higher after the data, with AUD/USD showing the most resilience among majors despite broad USD strength.
Traders are watching support at the 21-day EMA of 0.6592, followed by the 50-day EMA at 0.6553.
Buyers may see this as a window to step in.
RBNZ picks Breman; NZD lower
Anna Breman, deputy governor of Sweden’s Riksbank, has been appointed as the Reserve Bank of New Zealand’s next governor—its first female chief. Her five-year term begins in December.
Acting Governor Christian Hawkesby will remain in charge until Breman takes over, then exit the central bank. Hawkesby stepped in after Adrian Orr resigned in March following a funding clash with Finance Minister Nicola Willis.
The leadership shake-up continued last month when RBNZ chair Neil Quigley stepped down after nine years.
Breman, who joined the Riksbank’s executive board in 2019, previously held roles at Swedbank, Sweden’s Ministry of Finance, and the World Bank. In a London speech earlier this year, she noted that central banks may need to adapt to a more politically and economically uncertain world.
NZD/USD fell 0.7% overnight, in line with broader market moves.
Key resistance sits at the 21-day EMA of 0.5904, followed by the 50-day EMA at 0.5920.
Despite pressure, NZD/USD remains 6.5% above its April low of 0.5486.
Greenback comeback
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 22 – 27 September
All times AEST
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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 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.
