Wall Street Tumbles on Renewed U.S.–China Tensions

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Forex Market 

USD: Risk-Off Sentiment Deepens, AUD Slips to Weekly Lows

Risk sentiment soured on Friday after U.S. President Trump threatened “massive tariffs” on China in response to its new rare earth export controls. The headlines sparked broad risk aversion, sending Wall Street sharply lower and weighing heavily on commodity-linked currencies.
The Dow Jones fell -1.9%, S&P 500 -2.7%, and Nasdaq -3.6%. U.S. 10-year yields declined 8bps to 4.06%, while Brent Crude slid 3.8% to $62.10/bbl.
The AUD/USD traded within a 0.6472–0.65725 range before closing near the lows at 0.6472, pressured by broad USD strength and weaker risk appetite.

 

  • AUD/USD reached session highs of 0.65725 before reversing lower to 0.6546 ahead of the London open. Further demand is expected near 0.6420, with resistance seen around 0.6530.
  • AUD/NZD traded between 1.1305–1.1418, while NZD/USD held between 0.5717–0.5758.
  • EUR/USD climbed to 1.1630, while GBP/USD strengthened to 1.3370, both supported by lower U.S. yields.
  • USD/JPY slipped to 151.15 before recovering toward 153.29.
  • USD/CAD dropped to 1.3977 after a strong Canadian jobs report (+60.4k vs. 5k est.) kept the unemployment rate steady at 7.1%.
  • The USD Index (DXY) traded between 98.839–99.429, closing slightly firmer on the day.

 

Key Economic Data Ahead (Sydney Time)

 

General Market

 

Wall Street

  • Dow Jones -1.9% to 45,480
  • S&P 500 -2.7% to 6,553
  • Nasdaq -3.6% to 22,204
  • U.S. 10-year yields down 8bps to 4.06%
  • VIX up 31.8% to 21.66
  • Gold +0.9% to $4,013/oz
  • WTI Crude -4.2% to $58.9/bbl

Asia-Pacific

  • ASX 200 -0.1% to 8,958
  • Shanghai Comp -0.9% to 3,897
  • Nikkei -1.0% to 48,089
  • Hang Seng -1.7%
  • Shenzhen -2.0%

Europe

  • FTSE -0.9% to 9,427
  • DAX -1.5% to 24,241
  • CAC -1.5% to 7,918
  • Stoxx -1.7%
  • U.K. 10-year yields down to 4.67% (-6bps)
  • German 10-year Bund yields fell 4bps to 2.64%

 

Headlines to Watch 

  • United States:
    President Trump’s renewed tariff threats on China rattled global markets, saying a “massive increase” could be imposed and hinting there was “little reason” to meet President Xi in South Korea. The ongoing U.S. government shutdown, now entering its third week, has delayed key data releases including employment, trade, and inflation reports, leaving markets reliant on alternative data for economic signals.
  • United Kingdom:
    Focus turns to the upcoming Bloomberg UK Economic Survey, with GBP/USD holding firm near 1.3370 on expectations the BOE may maintain its restrictive stance amid sticky inflation.
  • Canada:
    The Labour Force Survey (Sep) surprised to the upside with +60.4k jobs (vs. +5k est.), reinforcing expectations the BoC will remain cautious ahead of its October 29 policy decision.
  • Australia & New Zealand:
    Risk aversion weighed on the Aussie and Kiwi, with AUD/USD closing near weekly lows around 0.6472 and NZD/USD near 0.5721.

Mid-market rates

Currency PairMid-market Rate
AUD/USD0.6499
AUD/NZD1.1336
AUD/JPY98.71
AUD/CNY4.6431
AUD/EUR0.5598
AUD/GBP0.4870
AUD/HKD5.0595

 

 

 

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