USD drops as Trump pushes for Ukraine progress
Geopolitics remains front and centre, with US President Donald Trump set to meet Ukrainian President Volodymyr Zelenskyy at the NATO summit in Turkey on Wednesday, as efforts to end the war in Ukraine remain in focus. Trump, whose relationship with Zelenskyy has been mixed, has repeatedly expressed frustration over the lack of progress towards a peace agreement.
Ahead of the summit, Trump also spoke with Russian President Vladimir Putin by phone. According to reports, Putin reiterated his willingness to support a swift resolution to the conflict in Ukraine. Separately, US Ambassador to NATO Matt Whitaker said Trump wants NATO members to move quickly towards spending 5% of GDP on defence.
The US dollar was mostly lower overnight, with the USD Index falling to its lowest level since 18 June.
The British pound extended its recent outperformance, with GBP/USD up 0.3%, while NZD/USD struggled ahead of tomorrow’s Reserve Bank of New Zealand decision, falling 0.2%.
AUD/USD extends rebound with resistance in focus
Seven major OPEC+ producers, including Saudi Arabia and Russia, agreed on Sunday to increase their combined production target by 188,000 barrels per day, according to Bloomberg. The decision is in line with the group’s plan to gradually restore output that was cut in previous years.
Since the supply unwind began, OPEC+ has brought back around 940,000 barrels per day, equivalent to nearly 1% of global oil demand.
At the same time, oil prices have fallen sharply from peaks reached during the conflict. Brent crude is currently trading near US$72 per barrel after dropping more than 40%, amid concerns that supply could outpace demand.
AUD/USD was higher overnight, up 0.2%, but is still trading about 5% below its May high of 0.7278. To strengthen the recovery, AUD/USD needs to break above the 21-day EMA at 0.6975, followed by the 100-day EMA at 0.7015. On the downside, 0.6900 remains the next key support level.
Meanwhile, AUD/EUR has climbed to a one-week high.
USD higher in Asia as USD/JPY rebounds
In Asia, the USD was mostly higher, helped by a 0.5% gain in USD/JPY.
USD/SGD is trading around 3% above its 28 January low of 1.2586. Support is near the 21-day EMA at 1.2904, with the 50-day EMA providing additional support at 1.2854.
The chart shows USD/SGD trading above the 80% level of its three- and six-month ranges. Current levels could offer opportunities for USD sellers.
USD/CNH gained 0.2%.
USD mixed, driven by USD/JPY
Table: seven-day rolling currency trends and trading ranges
