USD gains as US shares fall
US shares fell sharply overnight, driven by losses in megacap tech companies, but the lower than usual volumes of shares traded made some analysts suggest the move was mainly a result of the Northern Hemisphere’s “summer doldrums”.
The S&P 500 fell 0.6% while the tech-heavy Nasdaq dropped 1.7%. However, trading volume on the Nasdaq were down 8.2% on the ten-day average while volumes on the S&P 500 were down 22%.
In FX markets the US dollar was higher for a second day, with the USD index up 0.1%.
The USD’s best gains were against the Aussie, with the AUD/USD down 0.6%, and the kiwi, with the NZD/USD down 0.5% ahead of today’s Reserve Bank of New Zealand decision at 2.00pm NZST.
The euro and British pound were only moderately lower versus the USD, while the USD/SGD climbed 0.1%. The USD/CNH was flat.
Looking forward, the next key tests for the US dollar will be tonight’s Federal Reserve minutes, due at 4.00am AEST, and the Fed’s Jackson Hole Symposium, with a major speech from Fed chair Jerome Powell due 12.00am on Saturday.
Trump, Zelensky peace talks help USD
Recent White House talks between President Trump and European leaders sparked cautious optimism for a Ukraine peace deal.
Anxious to avoid the disastrous shouting match that ruined his last visit, President Zelensky repeatedly thanked Trump for his involvement.
He called it his most productive meeting with Trump yet and signaled plans to speak directly with President Putin before the month ends. A three-way summit involving Trump is expected to follow.
Meanwhile, the US dollar is holding slightly above its July low against the Singapore dollar, with USD/SGD still trading 1% higher than its lowest point in a decade. USD buyers may look to take advantage.
Aussie confidence climbs but AUD stalls
Australian consumer sentiment has jumped to its highest level in over three years, with the Westpac-Melbourne Institute index rising 5.7% to 98.5 in August.
The recent rate cut from the RBA appears to have lifted spirits, easing financial anxiety and hinting at a shift in household confidence.
It’s been 42 months since the index last crossed the optimism threshold of 100—marking one of the longest stretches of gloom since the survey began in 1974—but that streak may finally be nearing its end.
That said, the AUD/USD has recently lost momentum and with the pair now below 21-day EMA of 0.6509 and near key support at 0.6420. A break below 0.6420 sets up a move to 0.6380.
The next key psychological resistance will be at 0.6600 handle.
USD higher for second day
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 18 – 22 August
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.ve 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.
