Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
USD extends recent losses
The US dollar slipped lower overnight, falling to two-week lows, after disappointing economic data took some of the heat out of the USD’s 2024 rally that saw the currency up more than 5.1% at its peak.
Overnight, a steep drop in the US manufacturing purchasing managers index (PMI), which fell from 51.9 in March to 49.9 in April, hit the greenback. The services number, falling from 51.7 in March to 50.9 in April, also pressured USD sentiment.
The British pound rebounded from recent lows to produce the biggest gains overnight – the GBP/USD jumped 0.8%.
The Aussie was also stronger with the AUD/USD up 0.6%. The NZD/USD gained 0.2%.
The USD/SGD and USD/CNH were both flat.
Global PMIs turn mixed
The US number reflected a slip in activity globally with manufacturing numbers also disappointing in France, Germany and the UK overnight.
The reversal in manufacturing bucked a recent trend in 2024 which had seen a surprise rebound from the lows seen in August 2023.
Importantly, the reports show a shift in momentum between major economies. While France, Germany and the UK manufacturing numbers disappointed, the composite series continues to show an improvement. The US, on the other hand, has recently declined.
All eyes on Aussie CPI
Looking forward, Australian inflation number are the key release, due at 11.30am AEST.
The monthly inflation gauge has recently fallen to 3.4% in annual terms – not too far away from the Reserve Bank of Australia’s 2-3% target.
Today, the market is looking for the quarterly CPI number to match the monthly series with a 3.4% annual headline forecast. A higher number might boost the AUD – but disappoint mortgage holders hoping for an RBA rate cut.
USD index falls to two-week lows
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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