Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Greenback stages comeback from two-week lows
The US dollar was higher overnight as markets reacted to the passage of President Donald Trump’s budget bill through the House of Representatives although the financing deal still needs to pass the Senate.
The US dollar index had its first winning session of the week as it rebounded from two-week lows.
The USD’s best gains were in Europe with the EUR/USD down 0.4% and USD/CHF up 0.4%.
The USD/SGD climbed 0.3% while USD/CNH gained 0.1%.
AUD lower as economic pulse weakens
The Australian and NZ dollars were also weaker.
Yesterday’s purchasing manager index numbers found Australia’s business growth has slowed, with the S&P Global flash PMI Composite Output Index slipping to a three-month low of 50.6 in May, down from 51 in April.
The slowdown was more pronounced in the services sector, as the Services PMI hit a six-month low of 50.5, while the Manufacturing Output Index also dipped to 50.6 from 51.
S&P Global noted that while private-sector output and new orders continued to expand, growth rates have softened to some of the weakest levels seen in 2025, pointing to waning economic momentum.
On a brighter note, employment in both services and manufacturing sectors remained strong.
The AUD/USD remains in a sideways pattern with the pair trading between 0.6350 and 0.6515.
BoJ’s Noguchi sticks to plan amid bond market ripples
BoJ board member Asahi Noguchi stated on Thursday that there’s no need for significant adjustments to the central bank’s JGB plan for cutting JGB buying.
This stance draws attention as long-end bonds face a selloff and with the 40-year JGB auction looming on May 28.
From a technical lens, USD/JPY seems ripe for reversal, given the Bessent and Kato had just “reaffirmed their shared belief that exchange rates should be market determined and that, at present, the dollar-yen exchange rate reflects fundamentals,” the Treasury department said Wednesday.
USD rebounds
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 19 – 24 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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