US shares sell-off
Global markets were mostly lower overnight as renewed concerns around US banks triggered a broad sell-off in equities.
Financial stocks led the decline, dragging major indices lower and sparking a flight to safety.
The S&P 500 fell, down 0.6%, weighed down by regional banks, while the Dow and Nasdaq also closed in the red. The US’s KBW regional banking index fell the most since April.
The US dollar weakened as risk sentiment soured, with the greenback posting its biggest losses against traditional safe havens. USD/JPY and USD/CHF both dropped, reflecting investor demand for lower-risk assets.
However, despite the broader dollar softness, commodity currencies struggled to find support.
Aussie weaker after jobs
The Australian dollar was hit hard following a disappointing September jobs report.
While the headline number came in at 14.9k, just below the 20k expected, the unemployment rate rose from 4.3% to 4.5%, raising doubts about the resilience of the domestic economy.
Financial markets are now pricing in a higher chance of rate cuts from the RBA with a 74% probability of a rate cut on 4 November.
The AUD/USD fell 0.4% to two-month lows. The Aussie also underperformed on the crosses, reflecting a shift in sentiment after the jobs data.
USD/SGD back at support
In Asia, USD/SGD edged lower, falling 0.2% to test key support at its 21-day moving average around 1.2940.
While the Singapore dollar remains range-bound, technical levels are in focus as traders assess the next move.
The USD/CNH slipped 0.1%.
Overall, risk appetite remains fragile as investors digest mixed macro signals and monitor financial sector stress. With central bank expectations shifting and geopolitical tensions simmering, markets are likely to stay volatile heading into the weekend.
US bank worries hit FX
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 13 – 18 October
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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.
