Aussie and kiwi slide sharply
The US dollar surged to its highest level since May as the US-Iran war entered its third week.
US shares ended lower on Friday, marking a third straight week of losses, the longest losing streak in more than a year. A 12% jump in Brent crude last week weighed heavily on risk sentiment.
The Aussie was hit hard on Friday, with AUD/USD falling 1.4%. The pair reversed sharply after nearing 0.7200 on Wednesday, ending the week below 0.7000.
AUD/EUR slipped 0.5%, while the typically volatile AUD/JPY dropped 1.1%.
The kiwi also came under pressure. NZD/USD fell 1.4%, NZD/EUR lost 0.6%, and NZD/JPY declined 1.1%.
In Asia, USD/CNH rose 0.4% and USD/SGD climbed 0.3%, with key focus on the rising USD/JPY.
USD/JPY nears 160 for the first time since 2024
USD/JPY approached 160 on Friday, though markets do not expect Japanese authorities to intervene.
Unlike previous episodes, the yen’s weakness is widely seen as driven by economic fundamentals rather than speculation, reducing the likelihood of intervention. While Japan has stepped in before when the pair traded in the 160–162 range, traders believe simply reaching 160 will not be enough to prompt action.
Officials are instead likely to rely on verbal warnings, particularly given ongoing geopolitical uncertainty and limited backing from the US.
Key support for USD/JPY sits at the 21-day EMA at 157.1350, followed by the 50-day EMA at 156.3150.
RBA looks most likely to hike on Tuesday
The week begins with a heavy run of policy decisions. The Reserve Bank of Australia (Tuesday) looks the most likely to hike, with the cash rate currently at 3.85%. The Bank of Canada (Thursday) is expected to remain on hold at 2.25%.
The US Federal Reserve meets midweek, with no change expected, but markets will closely watch the statement for any shift in tone. The Bank of England (Thursday) and Bank of Japan (Friday) also announce policy decisions, while the European Central Bank (Friday) is expected to keep its deposit rate at 2.00%. Any surprise could trigger sharp FX moves.
Eurozone CPI (Wednesday) is forecast at 1.9% YoY, offering an important signal for the ECB’s outlook. In the US, PPI (Wednesday) will be watched for signs of pipeline inflation.
China releases February retail sales and industrial production on Monday, providing an early read on global demand. New Zealand’s Q4 GDP (Thursday) will be a key focus for the NZD, with modest growth expected.
Australia’s February employment report (Thursday) will test the RBA’s stance, with the unemployment rate last at 4.1%. Japan’s trade and industrial production data (Wednesday/Thursday) will add further insight into regional momentum, while China’s loan prime rate decision is due on Friday.
USD highest since May
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 16 – 20 March
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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.
