Greenback falls to early March lows
The US dollar fell overnight, with the USD index slipping to its lowest level since 2 March after a weaker-than-expected producer price index (PPI) reading eased US inflation concerns.
Geopolitical developments also supported risk sentiment. New peace talks between Israel and Lebanon were revealed overnight, while US President Donald Trump said negotiations between the US and Iran could restart in the coming days.
Across markets, more risk-sensitive currencies outperformed. AUD/USD rose 0.4% and NZD/USD climbed 0.6%.
The euro, British pound and Canadian dollar also gained but underperformed, allowing the Aussie and kiwi to strengthen against these currencies.
In Asia, USD/JPY led losses, down 0.4%, while USD/CNH and USD/SGD both slipped 0.1%.
AUD/USD at one-month high on RBA warning
Australia’s consumer confidence dropped sharply in April, recording its steepest monthly decline since the early days of the Covid pandemic. A spike in fuel prices and the Reserve Bank of Australia’s recent rate hike weighed heavily on household sentiment.
RBA deputy governor Andrew Hauser reinforced the cautious tone, saying policymakers are no longer confident that current interest rate settings are restrictive enough to rein in inflation risks. He said it was “easy to see” upside pressure on prices and warned that policy may yet need to respond, even as economic momentum shows signs of slowing.
The Westpac–Melbourne Institute Consumer Sentiment Index fell 12.5% to 80.1, with short-term expectations sliding back to levels last seen during the 2022–23 cost-of-living squeeze. Westpac said households see little chance of improvement and are bracing for further financial strain.
Despite the weak sentiment, AUD/USD is trading at a one-month high. Markets are currently pricing a 65% chance of another RBA rate increase in May.
While the Aussie has rallied, market positioning remains at elevated levels, which could exacerbate downside risks if risk sentiment deteriorates. On the downside, initial support sits at the 21-day EMA at 0.6994, followed by the 50-day EMA at 0.6973.
MAS tightens policy, but by less than expected
The Monetary Authority of Singapore raised the pace at which the Singapore dollar is allowed to appreciate, while leaving the policy band’s width and centre unchanged. It now expects core inflation in 2026 to average between 1.5% and 2.5%.
While the move broadly met expectations, muted follow-through suggests some disappointment among traders who had hoped for a more decisive shift.
Across Asia, USD/SGD is now around 1% above its recent January 28 low of 1.2586.
Key support levels are seen at the 21-day EMA (1.2787) and the 50-day EMA (1.2782). These areas may attract interest from USD buyers looking to add on dips.
Aussie, kiwi lead gains
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 6 – 11 April
All times 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.
