Market Update 02/05/2025

Forex Market

USD: Slightly stronger as data mix keeps markets cautious

The US dollar firmed slightly overnight, supported by a mixed set of economic data that left overall market sentiment cautious. Initial jobless claims unexpectedly rose to 241k (vs 223k expected), signaling a softening labor market, while ISM Manufacturing for April printed at 48.7 — still contractionary but better than the forecast of 47.9. Despite the data mix, the USD gained traction during the NY session, especially into the London rate set, pushing EUR/USD lower to 1.1266, AUD/USD to 0.63675, and USD/JPY to 145.73. USD/CAD also climbed to a high of 1.3862, reflecting broad dollar strength into the end of the day.

AUD: Trade surplus surprise but USD dominates

The Australian dollar traded within a relatively tight 0.63675–0.64275 range, closing around 0.6380/85. Sentiment was briefly supported by a stronger-than-expected March trade surplus (AUD 6.9b vs AUD 3.2b expected), but upside momentum was capped as USD strength resumed during the NY session.

Key Economic Data Ahead (Sydney Time)

General Market

Wall Street ended higher in a relatively calm session. The Nasdaq rose 1.5%, the S&P 500 gained 0.6%, and the Dow Jones added 0.2%. The 10-year US yield rose to 4.21%, while crude oil rebounded 1.4% to $61.90/bbl.

In Asia, the Nikkei climbed 1.1% after the BOJ held rates steady at 0.5%. The ASX 200 finished +0.2%, led by IT and real estate, while Hong Kong and Shenzhen were closed for holiday.

AUD/USD briefly hit 0.6427 on a strong trade surplus (AUD 6.9b vs 3.2b exp.) before falling back on USD strength.

In Europe, most markets were shut for Labour Day. The FTSE traded flat.

US data was mixed — jobless claims rose to 241k, while ISM Manufacturing fell to 48.7, still better than expected. The USD gained broadly into the NY afternoon, sending AUD/USD to 0.63675, NZD/USD below 0.5900, and USD/JPY to 145.73.

Here are the latest mid-market rates: