USD lower as Fed independence tested
The US dollar slipped and long-term bond yields climbed after President Trump announced plans to fire Federal Reserve board member Lisa Cook.
President Trump says he has grounds to remove Cook due to accusations of falsifying financial documents, but Cook has pushed back and said she would not leave. The battle looks headed to the courts.
Bond markets reacted with a so-called steepening of the yield curve, as long-term yields rose more than short-term yields. This move may also reflect growing concerns about US fiscal stability and inflation risks.
Despite the headlines, the dollar fell just 0.2% — a sign that markets are alert but not alarmed.
Locally, AUD/USD and NZD/USD both gained 0.2%.
In Asia, USD/CNH dipped 0.1%, while USD/SGD was unchanged.
Aussie steadies despite RBA hints at faster rate cuts
Minutes from the Reserve Bank of Australia’s August meeting suggest future rate cuts will depend on how the economy performs in the months ahead.
While members noted signs of a softer labour market, they highlighted steady job ads and vacancies, pointing to underlying resilience.
The discussion revealed that the labour market is already fairly balanced, which could open the door to faster rate cuts over the next year. However, some hiring pressures remain.
Inflation continues to cool as expected, but risks remain on both sides of the forecast. These include uncertainty around spare capacity, the pace of domestic demand recovery, and global trade dynamics.
Today’s monthly inflation release, due at 11:30am AEST, will be key. Economists expect a rise from 1.9% in June to 2.3% in July.
AUD/USD is holding above key 100-day EMA support at 0.6468, with resistance at the 50-day EMA of 0.6493.
China sends top negotiator to Washington as trade talks restart
China’s chief trade envoy, Li Chenggang, is heading to Washington this week for what could be the first round of renewed trade talks. The visit signals a push from both sides to build steady dialogue during the current tariff pause.
Li, a close aide to lead negotiator He Lifeng, is expected to meet with US Trade Representative Jamieson Greer, senior Treasury officials, and American business leaders.
On the charts, USD/CNH remains in a tight range. Resistance levels are at the 21-day EMA of 7.1787 and the 50-day EMA of 7.1846.
NZD/AUD plunge moves to “oversold”
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 25 – 31 August
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 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.
