USD lower on chip threat
The US dollar weakened across markets overnight after US President Donald Trump threatened a new round of tariffs on semiconductor chips.
President Trump stated he would impose a 100% tariff on computer chip and semiconductor imports. However, he noted an exclusion for companies building new manufacturing plants in the US, such as Apple.
As has been the case for much of this year, the threat of tariffs weighed on the US dollar, with the USD index down 0.7% overnight.
The USD was weaker in Asia, with USD/JPY and USD/SGD both down 0.2%, while USD/CNH fell 0.1%.
Kiwi higher after jobs; Aussie also benefits
Across the region, both the Aussie and kiwi dollars moved higher.
The New Zealand dollar strengthened following a better-than-expected jobs report, with the unemployment rate coming in at 5.2% versus the 5.3% forecast.
The NZD remains in focus with inflation expectations due at 3.00pm NZST.
NZD/USD gained 0.5%, while AUD/USD also rose 0.5%.
Bank of England in focus
Tonight, all eyes will be on the Bank of England.
The Old Lady of Threadneedle Street is expected to cut interest rates, with money markets pricing in a 96% chance of a cut (source: Bloomberg).
The move would see the BoE’s headline rate fall from 4.25% to 4.00%.
The GBP has recently weakened, with AUD/GBP near four-month highs and GBP/SGD near four-month lows.
USD hit by tariff news
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 4 – 9 August
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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.
