CITIZENS COMPASS– The US dollar yesterday, rebounded after Bloomberg reported the Trump administration isn’t pursuing currency commitments in trade negotiations, helping to ease concerns that the White House may be quietly targeting a weaker greenback. According to the piece, Treasury Secretary Scott Bessent is handling all FX matters directly, with no intention of allowing others to engage in currency policy discussions.
Still, recent outsized moves in Asian currencies—including the Korean won and Taiwan dollar—signal lingering market scepticism. Both nations are in active talks with Washington, and the rapid appreciation in their currencies suggests traders suspect concessions may be made to help secure trade deals. The broader FX picture also tells a story—despite repeated attempts, the dollar’s been unable to hold onto bounces, hinting at deeper mistrust around fiscal credibility and the longevity of the strong dollar policy, especially as long-end Treasury yields push back towards April highs.
AUD/USD is one pair to watch with local labour market data on deck. Price once again failed to break above the 200DMA, triggering another sharp reversal. Sellers continue to fade strength above .6500, with the pair now back near the 50% retracement of the September–April downtrend at .6430—an area that’s acted as both support and resistance in recent months. While bullish momentum has eased, the broader rebound from April lows remains intact, though the setup marginally favours selling into strength.
Today’s jobs data may not change expectations for a 25bp cut next week—already fully priced—but could shift views on what follows. With three cuts priced by year-end, down from five just weeks ago, it’ll be the unemployment, underutilisation and youth unemployment rates that matter most. The initial market reaction is likely to be driven by the employment change.
Gold’s slide beneath $3200 came as stronger US data, rising real yields, and Trump’s efforts to calm Middle East tensions pressured the metal. With momentum indicators leaning bearish, rallies may be sold, though a real test for bears sits at the 50DMA and December 2023 uptrend. A break of those could open the door to $3057.50. Near-term resistance sits at $3200 and $3270.
Later in the session, attention turns to US PPI and retail sales. Both may carry tariff-related noise, but the PPI—especially core components—will be watched closely given their influence on the Fed’s preferred inflation gauge, the core PCE deflator. If tariffs are lifting prices, that’s likely where it shows up first.
Source: TradingView
— Written by David Scutt
