InvestingLive Asia-Pacific FX news wrap: Tesla disappoints, RBA August cut questions

Forex Short News

U.S. earnings season continued after the regular session close, with Tesla posting its largest quarterly revenue drop in over a decade. Revenue fell by $3 billion year-over-year amid rising competition from lower-cost Chinese EVs and growing public backlash against CEO Elon Musk. Tensions between Musk and former President Trump, including the removal of EV incentives, further cloud the outlook. Musk warned of “rough quarters ahead” as the company pivots toward robotaxi development.

In Australia, flash PMIs for July all pushed further into expansion, suggesting resilience in the broader economy. While not a game-changer, the data marginally reduce the case for near-term RBA rate cuts.

Japan’s flash PMIs showed divergence in sector performance: manufacturing slipped back into contraction, falling to 48.8, while services rose to 53.5, the fastest pace in five months, supported by strong domestic demand.

New Zealand’s RBNZ Chief Economist Paul Conway signalled the central bank is prepared to cut interest rates further if inflation pressures continue easing as expected.

In China, the PBOC set the daily yuan reference rate at 7.1385 per dollar, the strongest level, for CNY, since November 6 and 120 pips above market forecasts.

RBA Governor Michele Bullock struck a less dovish tone than anticipated, downplaying June’s uptick in unemployment as consistent with forecasts and noting that Q2 core inflation may not have slowed as much as initially expected. She reiterated the need for more data before confirming a disinflation trend and emphasised a measured and gradual approach to easing. An August rate cut remains on the table but is clearly still being debated within the Bank.

This article was written by Eamonn Sheridan at investinglive.com.