Market Update 22/05/2025

Forex Market

USD: Risk-Off Drives Choppy Session in Majors

• EUR/USD topped at 1.1362 before fading
• GBP/USD hit 1.3468 highs post-CPI beat (1.2% m/m vs. 1.0% exp), but reversed in an ~80 pip roundtrip
• USD/JPY dipped to 143.295 lows before rebounding
• USD/CAD fell as low as 1.38145
• NZD/USD climbed to 0.59665 by NY afternoon
• AUD/USD extended to highs of 0.64685 before settling at 0.6430/35

NZD: Firmer on Risk Bid, Range in Play Ahead of PMI

Key Economic Data Ahead (Sydney Time)

General Market

Wall Street

• Dow Jones -1.9%
• S&P 500 -1.7%
• Nasdaq -1.4%
  Losses deepened into the NY afternoon, with late trade showing Dow -2.1%, S&P 500 -1.8%, and Nasdaq -1.7%.

Asia-Pacific

• Hang Seng +0.6%, Shenzhen +0.45%
• Nikkei -0.6%, ASX 200 +0.5%
  ASX gains were led by health care and materials, and AUD/USD settled near day highs.

Europe

• CAC -0.4%, DAX +0.4%, FTSE modestly higher
• Brent crude reversed Monday’s drop, trading up 1.0% to $66.40/bbl

Headlines to Watch

• RBA Cuts OCR to 3.85%
  AUD slipped post-decision as the RBA delivered a 25bps cut. Real estate stocks surged, but AUD/USD remains capped below 0.6450. Market now watching for tone of future guidance.
• UK CPI (Apr) Due Today
  Macquarie expects a reacceleration to 3.3% y/y (from 2.6%), driven by Ofgem’s energy cap hike and utilities. A stronger print may delay BoE cuts and lift GBP/USD near recent highs.
• Fed Speaker Lineup Includes 2025 Voters
  Jefferson, Williams, and Musalem are among today’s FOMC speakers. Market is highly sensitive to their tone — dovish remarks could weigh on USD, while hawkish ones may push yields higher.