Oil rebound hits Aussie, kiwi
The US dollar jumped to a two-month high overnight as renewed Middle East worries shook markets.
Crude oil prices pushed higher, with WTI and Brent both moving back towards the key USD100 per barrel level.
US shares fell, with the Dow Jones down 1.2% while the tech-focused Nasdaq lost 0.9%.
The US dollar, as measured by the USD index, climbed to its highest level since 7 April.
The risk-sensitive Aussie and kiwi led losses in FX markets.
AUD/USD fell 0.7% as the pair again turned sharply from resistance at 0.7200. A weaker-than-expected GDP result also weighed on the Aussie.
NZD/USD was hit the hardest, down 1.1%, with the kiwi now having given up most of last week’s RBNZ-driven gains.
AUD/NZD rose to a one-week high.
Middle East tensions keep USD firm in Asia
The USD was stronger across Asia as renewed tensions in the Middle East pushed oil prices higher overnight.
Iran’s Fars news agency said talks have stalled, while President Trump said negotiations continue daily and that the US has requested written nuclear commitments.
The backdrop worsened with escalation between Israel and Lebanon, alongside reports of attacks on Iran and retaliatory strikes targeting Bahrain and Kuwait.
In Asia, USD/SGD trades around 1.7% above its 28 January low of 1.2586.
Resistance sits near the 21-day average at 1.2771, with the 50-day average close by at 1.2766. The pair has retraced roughly 77% of its past month’s range.
USD/CNH jumped sharply from three-year lows, with the pair up 0.2%.
Aussie growth disappoints
Australia’s Q1 GDP grew 0.3% q/q and 2.5% y/y, missing forecasts of 0.4% q/q and 2.6% y/y.
Growth still sits above the roughly 2% trend pace, but the softer print trims momentum.
AUD/USD was only moderately lower after the GDP announcement, but was later sold-off during the US session.
Initial support sits at the 50-day average around 0.7130.
To move higher, AUD/USD needs to break above the 0.7200 key psychological handle, then 0.7278.
NZD’s gains last week now a distant memory
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 1 – 5 June
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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.
