US tech stocks in focus
US sharemarkets fell overnight, driving key FX markets lower, as technology stocks declined amid rising oil prices and a continued increase in long-term US bond yields.
The NZ dollar was the hardest hit, with NZD/USD down 0.4% as the market once again reversed from the key 0.5900 resistance level.
AUD/USD fell 0.2%, pulling back from the 10-week highs reached earlier this week.
In Asia, USD/JPY was broadly steady as markets waited to see whether the pair would make another push above 160.00.
USD/CNH was flat, while USD/SGD gained 0.1%.
Australian confidence lifts after rate pause
Australian consumer confidence improved for a second straight month, with the Westpac-Melbourne Institute Consumer Sentiment Index rising to 88.9 in August from 83.9. The rebound was led by mortgage holders after the RBA kept interest rates unchanged on 11 August.
However, caution remains evident. House price expectations fell to their lowest level in three years, while concerns about personal finances persisted. Sentiment remains almost 10% below year-ago levels, and unemployment expectations moved above the long-term average.
Markets are currently assigning around a 61% probability of another RBA rate hike by the end of 2026.
For AUD/USD, support is at the 21-day EMA at 0.7042, followed by the 50-day EMA at 0.7028. Resistance is at 0.7150.
Weak China data boosts hopes for fresh support
China’s July economic data on Monday pointed to a broad slowdown across key sectors, including industrial and services activity. While the figures were softer than expected, investors may view them positively because they increase pressure on policymakers to introduce stronger fiscal measures and more accommodative monetary settings to support growth.
Without a meaningful rebound, third-quarter GDP growth could slow further from the second quarter, putting the annual growth target at risk. The latest data highlights the urgency for additional policy action.
USD/CNH continues to trade near a three-year low. A break above the 21-day EMA at 6.7544 could pave the way towards the 50-day EMA at 6.7706. On the downside, psychological support is located at 6.7400.
Aussie, kiwi weaker after US sell-off
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 17 – 21 August
All times are in AEST
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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.
