Middle East tensions fuel oil surge
Oil prices climbed overnight with US crude gaining more than 1% and Brent crude nearing USD100 a barrel after reaching its highest level since late July.
The latest advance followed fresh attacks on Middle East energy infrastructure, including reported US strikes near Iran’s key export hubs at Kharg Island and Jask.
US Central Command also said its forces destroyed five Iranian crude tankers after two reported attempts to target a US Navy warship with ballistic missiles.
Across markets, equities fell, with the Dow Jones down 0.8%, while the tech-focused Nasdaq lost 0.6%.
Bond yields continued to climb, with the benchmark 10-year Treasury yield hitting its highest level since October 2023.
Aussie, kiwi capped by geopolitical nerves
Escalating geopolitical tensions have kept financial markets on edge and may limit support for risk-sensitive currencies such as the Australian and NZ dollars.
AUD/USD was flat, with the recent rally capped by major resistance at 0.7285.
NZD/USD posted the largest losses as the kiwi’s recent sell-off continued. NZD/USD fell 0.2%.
In NZD/USD, initial support sits at the key psychological level of 0.5800. On the upside, resistance is located at the 21-day EMA of 0.5888, followed by the 0.5900 level.
China inflation gains momentum as energy costs rise
China’s consumer inflation rose 0.8% y/y in August, matching forecasts and picking up from 0.5% in July. The increase marked the first acceleration since April, supported by higher energy costs and firmer food prices. Energy prices alone added 0.28 percentage points to headline inflation.
Factory-gate inflation also strengthened, with PPI rising 3.8% y/y, ahead of expectations for 3.6% and up from 3.5% previously. Higher oil and metal prices were the main drivers.
USD/CNH remains near its lowest level in almost three years. A move above the 21-day EMA at 6.7242 could open the way towards the 50-day EMA at 6.7454. On the downside, psychological support is seen at 6.7000.
Kiwi stands out as underperformer
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 7 to 12 September
Have a question? [email protected]
*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.
