Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
USD stronger as tech earnings boost
The US dollar was mostly higher overnight as US corporate earnings, including Microsoft and Meta, came in much stronger than expected despite growing concerns around the impact of tariff uncertainty.
The corporate news contrasted with a weaker than expected US GDP number with first-quarter advance US GDP falling 0.3% versus market expectations for a 0.3% gain.
In FX markets, the US dollar was mostly higher, with the USD index back near two-week highs.
European FX was mostly weaker with the euro and British pound both lower overnight.
Across APAC, the moves were more muted. The USD/SGD eased to one-week lows while the USD/CNH inched higher from one-month lows.
The NZD/USD fell to two-week lows before later recovering to end flat.
Australian CPI above consensus, but RBA remains likely to cut
The AUD/USD bucked the trend with the pair up 0.3% and still broadly near four-month highs.
The Australian dollar was higher yesterday after headline CPI for the first quarter of this year was 2.4% year over year, higher than the 2.3% consensus expectation.
The trimmed mean measure, which the Reserve Bank of Australia most closely watches, was 2.9%, higher than the consensus of 2.8%.
While higher, this is about what was expected and probably “good enough” for the RBA to make a 25 bps cut in May. The market continues to see a rate cut in May as a “sure thing” with 27bps priced in (source: Bloomberg).
The AUD/USD remains broadly near four-month highs, and hovering around 200-day EMA key resistance of 0.6399 – a technical level that has historically provided major resistance.
Official PMIs from China miss as USD/CNH sticks near lows
The Chinese economy looks to be showing some of the first impacts of tariff worries, with China’s official manufacturing PMI for April reported at 49, below the 49.7 forecast and 50.5 before.
PMI for non-manufacturing was 50.4, missing both the previous 50.8 and the expected 50.6. April’s composite PMI of 50.2 was much lower than March’s 51.4.
Specifically, manufacturing fresh export orders fell from 49 to 44.7, according to statistics from the National Bureau of Statistics.
USD/CNH has now corrected more than 2% from its recent highs of 7.4290 on 8 April, 2025.
Next key support level for USD/CNH lies on 200-day EMA of 7.2560.
USD buyers might look to take advantage soon given our expectations of higher USD/CNH over time. Our 12-month price target for USD/CNY is 7.5700.
Aussie higher after CPI
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 29 April – 3 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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