Market Update 22/05/2025

Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX. If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com

 

Forex Market

USD: Risk-Off Drives Choppy Session in Majors

It was a volatile session for FX as stronger U.S. yields (+11bps to 4.59%) and weaker equities saw risk sentiment swing.
  • 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

 

 

AUD: Demand Intact, Pre-PMI Ranges Hold

AUD/USD traded between 0.6419 and 0.64685, supported late by commodity strength and firmer NZD. Despite the risk-off backdrop, AUD held firm into the Asian open. Traders remain focused on 0.6300 demand and resistance near 0.6500. Preliminary PMI data today may provide directionality.

 

Key Economic Data Ahead (Sydney Time)

 

General Market

Wall Street

A broad-based selloff hit Wall St. as risk sentiment turned sharply lower.
  • 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

Asia saw mixed performances:
  • 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

Equities opened lower and finished mixed:
  • 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

  • Flash PMI Day Across Major Economies
    S&P Global Flash PMIs for May are due today across Australia, Japan, UK, Eurozone, and the U.S. Markets will closely watch for signs of demand softness and the early impact of U.S. tariffs on global supply chains. Australia’s reading already flagged the slowest new order growth in 2025 so far.
  • UK CPI: Strong Print, But ING Warns It May Be Overstated
    Although April UK CPI beat expectations at +1.2% m/m, ING notes much of the rise was utility-driven and may fade. GBP/USD saw a knee-jerk spike to 1.3468 but reversed soon after.
  • Tepid US Treasury Auction Raises Tax Jitters
    Weak demand for the 20Y Treasury auction sparked concerns over U.S. fiscal outlook and tax policies, pushing yields up 11bps and pressuring equity risk appetite.
  • Japan Machinery Orders Mixed; Yen Rallies as JGB Yields Spike
    Japanese data were inconclusive, but rising yields drove JPY strength. USD/JPY dropped to 143.295 before rebounding, with speculators seen covering short yen positions.

 

Mid-market rates.

Currency PairMid-market Rate
AUD/USD0.6438
AUD/NZD1.0845
AUD/JPY92.31
AUD/CNY4.6337
AUD/EUR0.5679
AUD/GBP0.4796
AUD/HKD5.0407

 

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