USD crashes to 1-year low
The U.S. dollar was clobbered in overnight trading after cooler than expected American inflation suggested Fed lending rates were closer to peaking. The broad swoon knocked the greenback to its lowest level in more than a year against both the euro and UK pound while the Australian and New Zealand dollars scored multiweek highs. U.S. consumer prices cooled to a 3% annual rate in June, the slowest pace since March 2021, a sizeable move from 4% in May. Less volatile core inflation also surprised to the downside, rising 3.8%, the lowest rate since October 2021, from 5.3%. American inflation is running high enough above the Fed’s 2% target that it’s keeping the U.S. central bank on track to hike on July 26. But the odds of an increase in September faded, taking a toll on the greenback.
Aussie soars to 3-week high
Australia’s dollar popped higher after a meaningful slowing in U.S. consumer prices suggested Fed borrowing rates were closer to peak levels. The Aussie dollar raced higher, cracking above resistance at 0.6700 to nearly 0.6800, AUD/USD’s highest level in three weeks.
A lack of much domestic data ahead of numbers next week on consumer inflation and monthly hiring are likely to see the Aussie take its cues from broader risk sentiment and the fragile state of the greenback.
AUD/USD shot 1.5% higher
Kiwi bounces to 7-week peak
The New Zealand dollar rolled to seven-week highs above 0.6300 against its U.S. rival after cooler American inflation dampened expectations for the Fed to deliver more than one more interest rate hike. The kiwi had experienced a choppy overnight session as it had moved lower after the Reserve Bank of New Zealand left its key rate steady at 5.50% as expected and signaled that rates are likely to remain there for the “foreseeable future.”
NZDUSD soared by 1.6%
AUDNZD slipped 0.1%
USD plunges after U.S. inflation cools
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 10 – 15 July
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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.
