Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist<\/p>\n
Greenback back near three-year lows<\/p>\n
Global markets were mostly stronger for a second day on Tuesday with the US\u2019s Dow Jones index up 0.4% and the S&P 500 up 0.1% to close at a new record high.<\/p>\n
Earlier concerns around the potential early termination of Federal Reserve chair Jerome Powell subsided overnight with Treasury Secretary Scott Bessent saying, \u201cThere\u2019s nothing that tells me that he should step down right now.\u201d<\/p>\n
The USD index fell 0.5%, bringing its losses for the week so far to 1.1%.<\/p>\n
The Scandinavians and Swiss franc continued their 2025 outperformance overnight with the biggest gains.\u00a0<\/p>\n
The Aussie and kiwi also outperformed with the AUD\/USD up 0.5% and NZD\/USD up 0.6%.<\/p>\n
The USD\/SGD fell 0.2% while USD\/CNH was flat.<\/p>\n
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AUD higher as RBA sticks to cautious script<\/p>\n
The Reserve Bank of Australia held interest rates steady in July, surprising analysts with a wait-and-see approach revealed in yesterday\u2019s meeting minutes.<\/p>\n
Rather than pushing forward with a third rate cut in just four meetings, board members chose to pause, arguing that rapid moves could undermine their steady and deliberate policy path.<\/p>\n
Officials stressed the need for clear evidence that inflation will return to target levels before making further moves. They also noted that the upcoming meeting will offer fresh data on inflation, jobs, and the global economy \u2013 key pieces for deciding their next step.<\/p>\n
Policymakers were more upbeat about global conditions, saying the worst-case scenarios feared in May now seem less likely. But timing and scale of any future policy shift remain uncertain, given ongoing volatility.<\/p>\n
On the charts, AUD\/USD shows signs of upward momentum. At the time of writing, the pair sits near its 21-day average of 0.6525, where AUD buyers may look to take advantage. Next near-term support at 0.6493 (50-day average) and 0.6450 (100-day average).<\/p>\n
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Chinese yuan at highs despite US\u2019s threats on oil<\/p>\n
Treasury Secretary Scott Bessent says future talks with China may touch on its oil deals with Russia and Iran \u2013 both under US sanctions.<\/p>\n
In a recent interview, Bessent said trade discussions between Washington and Beijing are making solid progress, creating space to raise tougher issues. He flagged China\u2019s sizable purchases of sanctioned oil as a potential point of concern in upcoming meetings.<\/p>\n
Bessent warned that countries buying Russian oil could face secondary tariffs of up to 100%, signalling that trade penalties may be used to pressure those bypassing international sanctions.<\/p>\n
The move reflects a broader US effort to shift bilateral talks beyond trade, using energy ties to spotlight geopolitical tensions.<\/p>\n
Meanwhile, USD\/CNH continues to show weakness. The pair sits just below resistance at 7.1773 (21-day average) and 7.1912 (50-day average), with further downside possible if momentum holds.<\/p>\n
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Greenback returns to lows<\/p>\n
Table: seven-day rolling currency trends and trading ranges \u00a0<\/p>\n
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Key global risk events<\/p>\n
Calendar: 21 \u2013 25 July<\/p>\n
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