Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Risk appetite returns amid key data releases
US equities rallied overnight, with the Nasdaq 100 surging 2.4% to close above 21,400, outperforming global peers. The S&P 500 also broke and closed above the 5,900 level, signaling renewed optimism.
The USD strengthened broadly overnight, with the DXY Index stalling near 99.50, at the time of writing.
Despite lower US yields, the USD/JPY edged higher, and closed at 144.21.
Both the AUD and NZD remained under pressure, with upcoming Australia’s CPI and RBNZ decision likely to drive near-term direction. Oil markets are focused on the OPEC+ ministerial meeting, where members are reportedly discussing a potential third consecutive production increase for July
Consumer confidence in the US exceeds forecasts
The US Conference Board reported that consumer confidence increased from 85.7 to 98, above the Bloomberg consensus of 87.1.
The Conference Board stated: “The recovery was evident prior to the US-China trade agreement on May 12 but accelerated after that.
Over the following six months, consumers’ pessimism about business conditions and employment availability decreased, and their confidence about future income prospects returned.
Looking at APAC FX, USD/SGD has bounced back up overnight.
The next key resistance levels are 21-day EMA of 1.2968, 50-day EMA of 1.3099.
Note that the chart shows select weekly moving averages.
USD buyers may look to take advantage now.
ECB Villeroy: The Eurozone’s rate normalization is probably not complete
According to Reuters, ECB policymaker Francois Villeroy de Galhau stated on Tuesday that the normalization of interest rates in the Eurozone is most likely not finished.
Villeroy, who is also the chairman of the Bank of France, stated in a speech that “this normalization is probably not complete, and we are likely to see this at our governing council next week.”
“The French inflation figure for May, published just this morning at the low level of 0.6%, is yet another very encouraging sign of disinflation in action,” Villeroy stated.
AUD/EUR is now trading near mid of 30-day trading range, with 50-day EMA of 0.5722 as the next key resistance level.
For EUR/SGD, it is still hovering around 25% of 30-day trading range, with 21-day EMA of 1.4627 as key resistance level.
Antipodeans down as all eyes on RBNZ today
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 26 – 30 May
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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.
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