Greenback trades to May 2025 highs
The US dollar was higher overnight after Iran launched a new missile attack on US troops. The US intercepted the attack. Crude oil jumped 4.1%.
The US dollar traded to 15-month highs following the attack.
The Aussie led losses, with AUD/USD down 0.3%.
The kiwi bucked the trend, with NZD/USD up 0.2%.
In Asia, USD/CNH and USD/SGD gained 0.1%.
RBA keeps rate hike option alive ahead of CPI
Speaking at the annual Annika Foundation event yesterday, RBA Governor Michele Bullock said inflation remains above the central bank’s comfort zone and that demand may need to ease further to bring price growth back within the 2%-3% target range. After raising rates three times this year, Bullock stressed policymakers remain ready to act again if necessary.
Bullock highlighted risks from higher oil prices, cost pressures flowing through the economy and weak productivity, while noting the impact on headline inflation has been less severe than initially expected. Her remarks reinforce expectations that another rate increase remains possible this year.
In the near term, Australian inflation data, due at 11.30am AEST, will be key.
For AUD/USD, the next major resistance stands at the 100-day EMA at 0.7004, while key support is seen at the 0.6950 psychological level. Elsewhere, AUD/NZD rose to a two-week high and AUD/EUR touched a one-month high, reflecting relative strength in the Australian dollar.
Yuan steadies as China points to US tariff limit
China said the US agreed during trade talks to keep any replacement tariffs on Chinese goods below a 20% ceiling. Washington recently introduced a new tariff, currently set at 12.5%, and indicated there is scope for further increases before reaching that limit. Beijing maintained its retaliatory measures from the initial round of tariffs and called on the US to remove unilateral trade restrictions.
China’s Commerce Ministry also rejected US claims that Chinese companies misappropriated intellectual property through model distillation, describing the allegations as a smear campaign and warning that it will take necessary steps to protect its interests.
For USD/CNH, the pair remains near a three-year low on a longer-term basis. A move above the 21-day EMA at 6.7782 could pave the way towards the 50-day EMA at 6.7894, while support is located at the 6.7650 psychological level.
Aussie lower after Iran attack
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 27 – 31 July
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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.
