U.S. dollar tumbles to 2-month lows
The Aussie dollar hugged recent ranges against a broadly weaker U.S. dollar. The greenback remained on its back foot as remarks from a chorus of Fed officials supported the view that America’s central bank may be closer to winding down its aggressive tightening cycle to tame inflation. A broad decline pushed the U.S. dollar to two-month lows against the euro and to its weakest in 15 months versus the UK pound. Upside for the euro was slowed by concerns about German growth after investor optimism fell more than expected. Commodity siblings from Canada and New Zealand stuck to recent ranges ahead of domestic central bank decisions. The Bank of Canada is forecast to raise rates for the 10th time since early 2022 with markets priced for Ottawa to hike to 5% from 4.75%. Down Under, New Zealand’s Reserve Bank is expected to keep its official lending rate steady at 5.50%. All eyes later Wednesday will be on U.S. inflation that, if markedly cooler, could weigh further on the greenback.
Aussie pinned toward bottom of range
The Aussie dollar failed to make much headway versus its weaker U.S. counterpart as worries about China continued to drag on sentiment. AUD/USD could see some volatility later Wednesday when U.S. markets open and the world parses the latest American inflation figures. The number to watch will be U.S. core inflation with forecasts suggesting underlying price growth moderated to a 5% annual pace in June from 5.3% in May. How hot or cool inflation prints will help steer the greenback ahead of the Fed’s late July meeting.
AUD/USD ticked up about 0.1%.
Decision day for RBNZ
New Zealand’s kiwi dollar nursed a softer bias amid expectations for the country’s Reserve Bank to keep lending rates steady at 5.50%. A status quo decision, coupled with signals that area rates may have attained peak levels, could leave the kiwi vulnerable. After this week, the RBNZ next meets in mid-August.
The Canadian dollar rose to one-week highs versus the USD with markets priced for Ottawa to hike rates Wednesday to fresh multi-decade highs.
NZD/USD shed about 0.2%
AUD/NZD gained roughly 0.33%
USD sinks to cellar of weekly ranges
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.
