Greenback bounces after horror week
The US dollar saw a small rebound on Friday after falling for most of last week after US inflation came in below expectations.
The lower inflation reading caused markets to speculate the Federal Reserve was less likely to raise US interest rates further. While market pricing sees a 92% chance of another 25-basis point rate hike at the Fed’s next meeting, no further hikes are priced in.
The shift in market expectations saw the US dollar tumble last week. The USD index fell to the lowest level since April 2022.
Aussie falls from five-month highs
The Australian dollar backed away from recent highs on Friday with the AUD/USD falling from five-month highs. The AUD/USD fell 0.7% on Friday.
The Aussie was mostly lower in other markets.
The NZD/USD also fell from five-month highs with the pair similarly hit by the USD rebound.
The USD was weaker in Asia, however with the USD/SGD falling to new five-month lows and the USD/CNH steady.
China GDP in focus this week
China will take centre stage early this week with June-quarter GDP due on Monday. Financial markets are looking for growth to slow to an annual rate of 7.5% but a quarterly result is forecast at a much slower 0.5%.
In Australia, the market will be focused on news that Michelle Bullock, current deputy governor of the Reserve Bank of Australia, will take over from current governor Philip Lowe when his term expires in September. Bullock’s appointment was announced on Friday. As a life-long employee of the RBA, Bullock is seen as likely to continue recent policy.
Otherwise, RBA minutes on Tuesday and employment on Thursday are the major Australian releases.
NZ sees critical June-quarter inflation on Wednesday. A weaker number would likely rule-out further rate hikes for the foreseeable future.
From the US, retail sales and industrial production, both due on Tuesday, will be closely watched.
USD sees late bounce, but remains near lows
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 17 – 21 July
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.
