Greenback slips from 14-month highs
The US dollar’s monster rally cooled overnight after US GDP beat forecasts but, importantly, PCE inflation was reported in line with market forecasts.
The inflation report cooled expectations for Federal Reserve rate hikes, and the USD turned lower from 14-month highs after gaining 2.4% since last week’s Fed decision.
In FX markets, AUD/USD recovered from recent lows to gain 0.1%.
NZD/USD was flat as it remains broadly stuck near six-month lows.
Aussie jobs hold firm
In Australia, all eyes were on yesterday’s May jobs report. Australia added 40.3k jobs in May, beating expectations of 32.5k. However, the previous month was revised sharply lower to a 40.7k drop from an earlier estimate of -18.6k. The participation rate held steady at 66.7%, up slightly from 66.6%. The unemployment rate eased to 4.4% from 4.5%, in line with forecasts.
Household spending also picked up, rising 5.5% year-on-year in May, ahead of the 4.3% forecast and a revised 5.1% previously.
AUD/USD remains under pressure, trading about 5% below its 6 May peak of 0.7278. In the near term, resistance sits around the 100-day EMA at 0.7030, with the 21-day EMA also hovering near that level. On the downside, 0.6850 stands out as the next key support.
In other markets, the Aussie was lower. AUD/EUR has weakened and is now trading at a two-week low, while AUD/GBP hit a two-month low yesterday.
USD lower in Asia as Bessent signals calm on rates
In the US, Secretary Bessent said inflation should ease back toward the central bank’s target as tensions linked to Iran fade. He stressed that he already expected price pressures to cool before the recent shock. He showed little support for raising rates, urging policymakers to stay open-minded about any temporary impact on consumer prices. He also pointed to productivity gains from AI as a factor that could help slow price increases.
Bessent backed a shift in communication style, supporting the move away from detailed forward signals and suggesting policymakers should avoid publishing rate projections.
In Asia, USD/CNH continues to hover near a three-year low, sitting about 0.8% above its 17 June trough of 6.7539. A break above the 100-day EMA at 6.8464 is needed to build stronger upward momentum. On the downside, the 50-day EMA at 6.8026 remains the next key support.
USD/SGD fell 0.1% as it turned from the seven-month highs seen earlier this week.
Greenback rally cools
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 22-27 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.
