Aussie, kiwi fall as sharemarkets weaken
The Aussie and kiwi led losses overnight as US sharemarkets extended their recent sell-off.
AUD/USD fell 0.8%, while NZD/USD lost 0.7%.
Higher oil prices and concerns about rising bond yields weighed on markets. The Dow Jones fell 0.6%, while the tech-focused Nasdaq lost 0.7%.
In other markets, the euro was weaker after the European Central Bank hiked rates, while USD/JPY rebounded from seven-month lows.
Tonight, all eyes are on the US CPI release, due at 10.30pm AEST.
Fed rethink lifts focus on USD/SGD
Support is building for Fed Chair Kevin Warsh’s proposal to reduce the number of Federal Reserve rate-setting meetings. At least six regional Fed presidents, including Cleveland Fed President Beth Hammack, Kansas City Fed President Jeffrey Schmid and Philadelphia Fed President Anna Paulson, have indicated they are open to reviewing the current schedule.
Paulson recently said it is worth reassessing how the Fed operates. Cutting meetings to six a year would represent a major change and leave the Fed meeting less often than the ECB, BoE and BoJ, which each hold eight scheduled meetings annually.
A reduced meeting schedule may concentrate market attention on each Fed decision.
Looking at APAC currencies, USD/SGD is trading about 0.5% above its 28 January low of 1.2586. Initial resistance stands at the 21-day EMA of 1.2711, followed by the 50-day EMA at 1.2770. On the downside, 1.2600 remains a key support level.
China strikes softer tone with US
China signalled a willingness to engage in constructive discussions with the US on artificial intelligence while pushing back against accusations that its leading AI firms systematically extract proprietary knowledge from American companies.
China’s Commerce Ministry said it would take firm countermeasures if Washington moves to restrict Chinese AI companies under the banner of preventing model distillation. Beijing also accused the US of seeking dominance in the AI industry and disrupting normal business activity.
USD/CNH remains close to its lowest level in nearly three years. A break above the 21-day EMA at 6.7226 could pave the way towards the 50-day EMA at 6.7439. On the downside, psychological support is located at 6.7000.
Aussie, kiwi hit
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 7 to 12 September
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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.
