Global overview
Another solid week for the USD saw the greenback complete its longest winning streak since January 2005. Asian FX markets have been particularly hard hit. The European Central bank is likely to be this week’s highlight – it might be the last chance for the ECB to hike.
USD dominates as it hits 18-year record
The greenback ended the week at six-month highs with the USD index completing the longest weekly winning streak since January 2005.
The Federal Reserve’s more than 500-basis point move to hike rates since early 2022, along with ongoing strong US data, has made the US dollar the standout currency across FX markets.
The USD index has climbed more than 5.5% since mid-July with the market now at the highest level since March this year.
Asia FX continues to struggle
Asian FX markets have been particularly hard hit recently with the US economy’s outperformance in stark comparison with China’s disappointing recovery in 2023.
The Chinese yuan fell further last week with the USD/CNH ending at the lowest closing level since the offshore RMB was introduced in 2009.
Other key markets were also weaker across Asia. The Japanese yen extended losses with the USD/JPY closing at ten-month highs on Friday.
The AUD/USD was flat on Friday but remains down 1.6% so far in September. The NZDUSD, also flat on Friday, is down 1.4% this month
ECB key this week
This week, the USD’s next move is likely to be driven by key inflation numbers due Wednesday night. US retail sales are due on Thursday.
Also critical for the greenback, Thursday night’s European Central Bank meeting will provide further evidence on the likely relative rate paths between the US and Europe.
Financial markets see a 40% chance that the ECB will hike rates, but any decision to hold rates steady from the ECB might drive the EUR lower and provide further support for the USD.
USD steady at highs ahead of key inflation reading
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 11 – 16 September
All times AEST
Have a question? [email protected]
*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.
