USD stalls as Fed probe rattles
The USD index consolidated near technical resistance as markets awaited US critical inflation print.
The Department of Justice opened an investigation into the Federal Reserve, triggering sharp opposition from former Fed officials and Republican party members. Powell characterized the probe as part of broader administrative pressure, warning that criminal indictment threats stem from the Fed setting rates based on economic evidence rather than presidential preferences.
Gold surged 2.5% to fresh record highs while silver jumped 7.5%. US 10-year yields tested 4.20% before settling two basis points higher at 4.185%.
Trump threatened severe consequences if the Supreme Court strikes down his tariff plan, claiming the US would owe “hundreds of billions of dollars” in refunds.
US equities recovered early losses, with the S&P 500 gaining 0.2% and Nasdaq up 0.25%.
UK gilts closed at session highs after labour market data showed persistent hiring weakness. Permanent staff placements hit a four-month low while worker availability surged. Business confidence fell to five-year lows. Former Tory Chancellor, Nadhim Zahawi defected to Reform UK, citing a “national emergency.”
AUD/USD gains 0.36% and NZD/USD up 0.7% overnight on dollar weakness.
US inflation in spotlight
US inflation data takes the stage Wednesday, with core prices expected to rise 0.35% (consensus: 0.3%), lifting the annual rate to 2.78%. Headline inflation is forecast at 0.37%, driven by higher food and energy costs.
Looking at APAC FX, USD/SGD now looks towards the next key resistance of 50-day EMA at 1.2903, followed by a 100-day EMA of 1.2922.
USD buyers may look to take advantage given the pair is near oversold conditions.
Aussie job ads slide again
Australian job ads fell for the sixth straight month in December, dropping 0.5% after a 1.5% fall in November. They are now 7.4% lower than a year ago but still sit 6.2% above pre-pandemic levels, according to ANZ and Indeed.
The biggest declines came in retail, sales, and food as seasonal hiring wound down. By contrast, demand picked up in logistics, beauty, wellness, and healthcare, especially for physicians and surgeons.
Despite the slowdown, the labour market remains tight, with under-utilisation well below average, helping smooth out monthly swings.
AUD/USD is now above 0.6700 handle at the time of writing.
The next key support lies at 21-day EMA of 0.6681, followed by 50-day EMA of 0.6633.
AUD/USD is now near the bottom of the ascending channel.
Antipodeans gain on weaker dollar
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 12 – 16 January
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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.
