Market Update 09/05/2025

USD: Broadly Stronger on US Data and BoE Divergence
The US dollar strengthened across the board overnight, buoyed by firm US yields, soft risk appetite, and modestly better-than-expected jobless claims. The FOMC policy hold and rising labour costs reinforced market caution, pushing USD/CAD above 1.3930 and USD/JPY to 146.175. GBP saw a volatile session after the BoE’s dovish 25bps rate cut, eventually bouncing back on NY flows.

• AUD/USD fell to 0.63955 after trading as high as 0.64639

• NZD/USD dipped to 0.5901

• EUR/USD and GBP/USD printed lows of 1.1212 and 1.3238 respectively

• USD/CAD hit 1.3932 highs

• USD/JPY moved up to 146.175

AUD & NZD: US Strength Caps Asia-Pacific Sentiment
AUD/USD peaked at 0.6463 on improved Asian equities but reversed in the NY session as gold fell and the USD rallied. Sentiment remains capped by US strength and policy divergence.

Key Economic Data Ahead (Sydney Time)

General Market

• Wall Street
  US equities ended firmly higher as investors shrugged off mixed data and focused on resilient earnings and macro trends.
  The Dow Jones climbed by 1.3%, S&P 500 rose 1.4%, and the Nasdaq advanced 1.9%.
• Fixed Income & Commodities
  The US 10-year yield rose sharply by 10bps to 4.38%, reflecting concerns over persistent labor costs.
  Crude oil prices rallied by 3.3% to $63.20/bbl on growing supply concerns.
  Gold weakened, placing pressure on commodity-linked currencies.
• Asia-Pacific Equities
  Australia’s ASX 200 gained 0.2%, led by strength in utilities and industrial sectors.
  Chinese and Japanese equities also advanced, with Shenzhen up 0.6%, Hang Seng and Nikkei both rising 0.4%.
• European Markets
  The Stoxx, CAC, and DAX indices each rose approximately 1.0%, supported by strong market momentum.
  The FTSE underperformed, declining 0.3%.
  The Bank of England cut rates by 25bps to 4.25%, with policymakers split in their vote.
  GBP/USD initially dropped to 1.3242 before rebounding back to near 1.3340.