USD bounces after heavy sell-off
The greenback was stronger overnight, with the USD index rebounding sharply from four-month lows as financial markets continue to digest the impact of this week’s bond market actions from the US Treasury.
The US dollar has fallen this week after US Treasury Secretary Scott Bessent announced a doubling of the government’s weekly bond buyback program. The Treasury will expand the weekly cap from USD2b to USD4b.
The US Treasury took action after long-term bond yields hit their highest level since 2007, driven by concerns about government spending, the war with Iran and higher inflation.
However, the US dollar rebounded overnight, with the USD index climbing from its lowest level since 14 May.
The stronger US dollar saw most other FX markets move lower.
AUD/USD fell 0.2%, weighed down by yesterday’s disappointing jobs numbers.
The kiwi bucked the trend, with NZD/USD up 0.1%.
In Asia, USD/JPY gained 0.6%. USD/SGD gained 0.1%, while USD/CNH fell 0.1%.
Aussie jobs data disappoints
Australian employment fell by 15.8k in July, missing expectations for a 12k increase and reversing part of June’s revised 82.2k gain. The unemployment rate edged up to 4.5% from 4.4%, signalling a softer labour market.
Full-time employment rose by 16.3k but slowed sharply from June’s revised 48.9k increase. Part-time employment dropped by 32.2k after a revised 31.4k gain previously. The participation rate held steady at 66.9%, matching expectations.
After the weaker data, AUD/USD slipped from a two-week high. Support is seen at the 21-day EMA of 0.7054, followed by the 50-day EMA at 0.7034. Resistance remains at 0.7150. Elsewhere, AUD/EUR fell to a two-week low, while AUD/NZD slipped to a one-week low.
Singapore moves to strengthen fund management appeal
Singapore plans to exempt investment profits earned by fund managers from managing selected funds, including single-family offices.
The Monetary Authority of Singapore (MAS) said further details will be announced in the 2027 Budget. The move responds to Hong Kong’s proposed expansion of tax-free treatment for carried interest and performance-related earnings, which could have given Hong Kong a tax advantage of more than 20%.
In currency markets, USD/SGD remains about 1% above its 28 January low of 1.2586. Initial resistance is at the 21-day EMA of 1.2809, followed by the 100-day EMA at 1.2836. On the downside, 1.2650 remains the next key support level.
Greenback stages comeback
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.
