USD lower ahead of Fed at 5.00am AEDT
The US dollar was mostly weaker overnight, with financial markets on edge ahead of the upcoming Federal Reserve decision.
The US Federal Reserve is widely expected to cut interest rates by 25 basis points to a new range of 3.75% to 4.00%.
US money markets are pricing in a 99.9% chance of a cut (source: Bloomberg).
The Aussie extended its recent outperformance, with AUD/USD up 0.4% ahead of today’s critical September-quarter CPI release. The currency reached its highest level since 9 October.
Australian headline annual inflation is forecast to rise from 2.1% in the June quarter to 3.0% in the September quarter, making a Reserve Bank of Australia rate cut next week less likely.
NZD/USD was also stronger, with the pair up 0.2% to reach three-week highs.
Trump–Takaichi meet, USD/JPY slips ahead of BoJ
US President Donald Trump met Japan’s new Prime Minister Sanae Takaichi in Tokyo on Tuesday, offering her “anything you want” and applauding her plan to ramp up defence spending. The meeting marked a warm start to their relationship, with both leaders pledging to deepen cooperation across trade and security.
Takaichi, a close ally of former Prime Minister Shinzo Abe, called for a “new golden age” in US–Japan ties. Trump echoed the sentiment, saying the two nations had moved past earlier trade tensions and were ready to work more closely. The pair also signed agreements on critical minerals and defence collaboration. USD/JPY pulled back from recent two-week highs. The pair now hovers near support at the 21-day EMA of 151.11, followed by the 50-day EMA of 149.67. Dollar buyers may step in if prices dip further
USD/SGD slips as EU–China talks loom
The EU and China are set to meet in Brussels this week for high-stakes trade talks, aiming to ease tensions after Beijing tightened controls on rare earth and chip exports. A senior Chinese technical team will arrive Thursday, following preparatory discussions on Monday.
EU trade chief Maroš Šefčovič called the export curbs “unjustified and harmful”, warning they’ve already disrupted European manufacturing. Brussels is crafting a contingency plan and weighing retaliatory trade measures.
The talks will unfold alongside a separate meeting in South Korea between US President Donald Trump and Chinese President Xi Jinping, as both sides seek to cool their own trade friction.
In Asia FX, USD/SGD has slipped amid broad dollar softness. The pair now hovers near key support at the 100-day moving average of 1.2922, with the next level at the 50-day average of 1.2911.
USD weakens ahead of Fed
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 27 – 31 October
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.
