Australia, NZ dollars hit new 2025 highs amid more US tariff chaos
The Aussie rallied 0.6% to US$0.6536, the highest since late November. It jumped 1.4% last Friday to break above the 200-day moving average of US$0.6448, with resistance now at around US$0.6550.
The kiwi dollar gained 0.6% to US$0.6029, the highest since early November. It surged 1.5% last Friday, with support solid at the 200-day moving average of US$0.5877.
Trump last Friday threatened to ratchet up tariffs on the European Union (EU) and warned Apple he may slap a 25% levy on all imported iPhones, sending US shares and the US dollar sharply lower.
However, in a reversal on Sunday, he backed off on the EU tariff plan and agreed to extend the deadline for talks until July 9.
Wall Street futures rallied 1%, with better risk appetite helping the two Antipodeans extending their gains yesterday.
'Any tariff news could inject more volatility into currency markets and pull the US dollar down,' said Joseph Capurso, head of international economics at the Commonwealth Bank of Australia.
'The Aussie dollar and the US dollar could break above the topside of its recent range of US$0.6350 to US$0.6550 this week.'
Tariff news aside, this week is set to be busy for the two Antipodeans.
The Reserve Bank of New Zealand will meet tomorrow when it is widely expected to cut interest rates to 3.25%, though uncertainty remains about its next moves.
Swaps imply a quarter-point rate cut has been fully priced in, with rates bottoming at either 3% or 2.75% later this year.
Australia will release its monthly consumer price index data today and retail sales on Friday.
The updates have gained more importance after the central bank opened the door to further policy easing last week.
A rate cut in July is now priced at a 65% probability, with a total easing of 75 basis points expected by early next year. — Reuters
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
4 minutes ago
- New Straits Times
Nvidia orders 300,000 H20 chips from TSMC due to robust China demand, sources say
BEIJING/SHANGHAI/NEW YORK: Nvidia placed orders for 300,000 H20 chipsets with contract manufacturer TSMC last week, two sources said, with one of them adding that strong Chinese demand had led the US firm to change its mind about just relying on its existing stockpile. The Trump administration this month allowed Nvidia to resume sales of H20 graphics processing units (GPUs) to China, reversing an effective ban imposed in April designed to keep advanced AI chips out of Chinese hands due to national security concerns. Nvidia developed the H20 specifically for the Chinese market after US export restrictions on its other AI chipsets were imposed in late 2023. The H20 does not have as much computing power as Nvidia's H100 or its new Blackwell series sold in markets outside China. The new orders with Taiwan's TMSC would add to existing inventory of 600,000 to 700,000 H20 chips, according to the sources who were not authorised to speak to media and declined to be identified. For comparison purposes, Nvidia sold around 1 million H20 chips in 2024, according to US research firm SemiAnalysis. Nvidia CEO Jensen Huang said during a trip to Beijing this month that the level of H20 orders it received would determine whether production would begin again, adding that any restart to the supply chain would take nine months. The Information reported after Huang's trip that Nvidia had told customers it had limited H20 stocks available and it had no immediate plans to restart wafer production for the GPU. Nvidia needs to obtain export licenses from the US government to ship the H20 chips. It said in mid-July it had been assured by authorities that it would get them soon. The US Department of Commerce has yet to approve those licenses, one of the sources and a third source said. Nvidia on Monday declined to comment on the new orders or the status of its license applications. TSMC declined to comment. The US Commerce Department did not immediately respond to a request for comment. Nvidia has asked Chinese companies interested in purchasing Nvidia H20 chips to submit new documentation including order volume forecasts from clients, said one of the sources and a fourth source. KEY PRODUCT IN US-SINO TRADE WAR The Trump administration said the resumption of H20 sales was part of negotiations with China over rare earth magnets - elements essential for many industries and which Beijing had limited exports of as trade war tensions escalated. The decision drew bipartisan condemnation from US legislators who are worried that giving China access to the H20 will impede US efforts to maintain its lead in AI technology. But Nvidia and others argue that it is important to retain Chinese interest in its chips - which work with Nvidia's software tools - so that developers do not completely switch over to offerings from rivals like Huawei. Before the April ban, Chinese technology giants including Tencent, ByteDance and Alibaba substantially increased H20 orders as they deployed DeepSeek's cost-effective AI models as well as their own models. The popularity of Nvidia products in China, despite the advent of rival, albeit less powerful, offerings from Huawei, has been underscored by a boom in repair demand for its other banned GPUS - many of which have been smuggled into the country. After the April ban on H20 sales, Nvidia warned that it would have to write off US$5.5 billion in inventories, while Huang told the Stratechery podcast that the company also had to forgo US$15 billion in potential sales. (
New Straits Times
4 minutes ago
- New Straits Times
Palm follows Dalian palm olein, Chicago soyoil lower
KUALA LUMPUR: Malaysian palm oil futures fell for a third consecutive session on Tuesday, weighed down by weaker Dalian palm olein and Chicago soyoil, although gains in crude oil prices limited the decline. The benchmark palm oil contract for October delivery on the Bursa Malaysia Derivatives Exchange slid RM19, or 0.45 per cent, to RM4,223 (US$997.87) a metric ton in early trade. Dalian's most-active soyoil contract rose 0.05 per cent, while its palm oil contract shed 0.56 per cent. Soyoil prices on the Chicago Board of Trade were down 0.54 per cent. Palm oil tracks price movements of rival edible oils, as it competes for a share of the global vegetable oils market. Oil extended gains, lifted by hopes of improved economic activity after the US-EU trade deal, a potential US-China tariff truce and President Donald Trump's shorter deadline for Russia to end the Ukraine war. Stronger crude oil futures make palm a more attractive option for biodiesel feedstock. The ringgit, palm's currency of trade, weakened 0.09 per cent against the dollar, making the commodity slightly cheaper for buyers holding foreign currencies. Palm oil may fall to RM4,161 per ton, as it has pierced below support at RM4,211, Reuters technical analyst Wang Tao said. Asia shares eased while the euro nursed its losses as investors pondered the downside of the US-EU trade deal and the reality that punishing tariffs were here to stay, with unwelcome implications for growth and inflation.
The Star
34 minutes ago
- The Star
Stock markets fall as trade relief fades, eyes on data and earnings
A person stands in front of an electronic stock board showing Japan's Nikkei index at a securities firm Tuesday, July 29, 2025, in Tokyo. (AP Photo/Eugene Hoshiko) HONG KONG: Stocks fell Tuesday (July 29) as the positivity sparked by recent US trade deals dissipated, with investors now focused on the release of key data and earnings, and the Federal Reserve's next policy meeting. While Donald Trump's agreement with the European Union on Sunday was seen as better than a tariff standoff, observers pointed out that the US president's 15 per cent levies - with none on American goods - were still much higher than before. The pact, which followed a similar one with Japan last week, still left many worried about the economic consequences, with auto companies particularly worried. "The 15 per cent blanket levy on EU and Japanese imports may have helped markets sidestep a cliff, but it's no free pass," said Stephen Innes at SPI Asset Management. "With the average effective US tariff rate now sitting at 18.2 per cent... the barrier to global trade remains significant. The higher tail risk didn't detonate, but its potential impact on the global economy hasn't disappeared either." And National Australia Bank's Ray Attrill added: "It hasn't taken long for markets to conclude that this relatively good news is still, in absolute terms, bad news as far as the near term (through 2025) implications for eurozone growth are concerned." Traders are also keeping an eye on US talks with other major economies, including India and South Korea. After a tepid day on Wall Street - which still saw the S&P and Nasdaq hit records - Asia turned negative. Tokyo, Hong Kong, Shanghai, Sydney, Singapore, Wellington, Taipei, Manila and Jakarta were all in the red. The euro held its losses from Monday, having taken a hit from worries about the effects of the trade deal on the eurozone. The first of two days of negotiations between top US and Chinese officials in Stockholm concluded Monday with no details released, though there are hopes they will agree to extend a 90-day truce that ends on August 12. The two imposed triple-digit tariffs on each other earlier this year in a tit-for-tat escalation, but then walked them back under the temporary agreement reached in May. Investors are also looking ahead to a busy few days that includes earnings from tech titans Apple, Microsoft, Meta and Amazon, as well as data on US economic growth and jobs creation. That all comes as the Fed concludes its policy meeting amid increasing pressure from Trump to slash rates, even with inflation staying stubbornly high. While it is expected to stand pat on borrowing costs, its post-meeting statement and comments from boss Jerome Powell will be pored over for clues about its plans for the second half of the year in light of the tariffs. Oil prices extended Monday's rally after Trump shortened a deadline for Russia to end its war in Ukraine to August 7 or 9, following which he vowed to sanction countries buying its crude. - AFP
