Greenback lower on Fed tension
The US dollar weakened overnight as markets ramped up bets on a Federal Reserve rate cut next month. Financial market pricing now implies an 89% chance of a cut, up from 72% before Fed Chair Jerome Powell’s Jackson Hole speech last Friday.
Adding to the pressure, President Trump’s move to oust Fed board member Lisa Cook—accused of providing incorrect information on a mortgage application—has reinforced expectations that the White House will push for lower rates.
Across markets, the USD was moderately weaker.
The AUD/USD rose 0.2%, while NZD/USD was flat.
USD/SGD slips from one-month highs as Trump eyes Malpass for Fed
President Trump is reportedly considering David Malpass as a swift replacement for Fed Governor Lisa Cook, according to the Wall Street Journal. Economic adviser Stephen Miran is also said to be in contention.
Malpass, who led the World Bank from 2019 to 2023, previously served as Treasury Under Secretary for International Affairs and was a key economic adviser during Trump’s 2016 campaign. His long résumé includes roles under Presidents Reagan and George H. W. Bush.
The US dollar was broadly weaker in Asia overnight, though it had earlier touched one-month highs against the Singapore dollar.
USD/SGD now sits 1.4% above its July low of 1.2698. Sellers may eye the next key level at 1.2939, near the 100-day moving average. Expect more volatility as political uncertainty builds.
AUD/USD holds steady despite inflation jolt
Australia’s consumer prices surged in July, marking the fastest annual rise in a year. CPI rose 2.8% year over year—well above last year’s 1.9% and beating the 2.3% forecast—driven by gains in housing, food, alcohol, and tobacco.
The RBA’s preferred trimmed mean rose from 2.1% to 2.7%, while core inflation (excluding volatile items and travel) jumped to 3.2% from 2.5%. The July school holidays and rising power bills added further pressure.
Although the RBA cut rates by 25 basis points earlier this month and signalled flexibility, this inflation surprise could complicate its next move. Markets are now leaning toward a rate hike in November.
Despite the inflation spike, AUD/USD remains rangebound. Resistance is seen at 0.6600, while support lies near 0.6469, the 100-day moving average.
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Calendar: 25 – 31 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 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.
