US dollar and stocks fall again, Aussie dollar sinks after RBA, but Asian markets surge

The dollar extended its losing streak on Tuesday, dragged down by the Federal Reserve’s caution on the US economy and renewed focus on possible FX talks between Washington and Tokyo.

According to data from Reuters, the US currency fell across the board after Monday’s sell-off, which followed Moody’s downgrade of the US sovereign credit outlook over rising deficit concerns.

The greenback slipped another 0.2% against the Japanese yen, landing at 144.510 and briefly touching its weakest point in nearly two weeks. Traders are watching closely as US President Donald Trump’s tax overhaul heads toward a key vote in Congress, with markets bracing for effects depending on the outcome.

Japan’s Finance Minister Katsunobu Kato said Tuesday that he expects discussions with US Treasury Secretary Scott Bessent to stick to their agreement that “excessive currency volatility is undesirable.”

Aussie dollar drops after surprise RBA rate cut

The Australian dollar also slid Tuesday, dropping 0.68% to $0.64135 after the Reserve Bank of Australia surprised markets by cutting interest rates by 25 basis points. That erased almost all of the Aussie’s 0.8% gain from Monday. The RBA also signaled that more cuts could be coming soon.

In its monetary policy statement, the RBA said, “Headline inflation is expected to increase over the second half of 2025 as temporary government subsidies to households are unwound, before returning to around the midpoint of the target range later in the forecast period.”

Despite those expectations, the RBA believes the major inflation risks have “substantially” eased. Australia’s most recent inflation data shows consumer prices rose just 2.4% in Q1, the lowest reading in four years and within the central bank’s 2%–3% target. But with global trade tensions still unresolved, the RBA isn’t confident in stability just yet.

Asian stocks rise as China cuts rates again

While the dollar struggled and US stocks turned red, Asian markets rallied on fresh stimulus from Beijing. On Tuesday, the People’s Bank of China lowered both of its main lending rates — the one-year loan prime rate was trimmed to 3.0% from 3.1%, while the five-year rate was cut to 3.5% from 3.6%. The move was designed to support growth at a time when foreign trade uncertainty continues to hang over the region.

Hong Kong’s Hang Seng index gained 1.49%, closing at 23,681.48. China’s CSI 300 index rose 0.57% to end at 3,899.37. Tokyo’s Nikkei 225 finished slightly higher, up 0.08% at 37,529.49, while the broader Topix closed just 0.02% stronger at 2,738.83.

South Korea’s Kospi was flat at 2,601.8, while the tech-heavy Kosdaq added 0.25% to finish at 715.55.

US stock futures slipped early Tuesday. The S&P 500 futures dropped 0.2%, threatening to snap the index’s six-day winning streak. Nasdaq 100 futures were also down, losing 0.3%. Futures for the Dow Jones Industrial Average were barely positive.

This followed a sluggish Monday session where the S&P 500 inched up 0.09%, notching its sixth straight gain. The Dow added 137 points, or 0.32%, and the Nasdaq Composite barely moved, up just 0.02%.

One name that stood out in premarket was Home Depot. The home improvement chain’s stock rose 2% after it confirmed it still expects full-year sales growth of 2.8%. CFO Richard McPhail told analysts that the company had “no plans to raise prices” even as tariffs remain elevated.

At the same time, Chinese support sent stocks climbing in Hong Kong, Shanghai, and Tokyo. While Wall Street futures flagged slightly, Asian traders focused on the rate cuts and pushed equity prices higher. Every corner of the market was moving — just not in the same direction.

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