Currency Market Analysis

May 22, 2017 | Currency Market Analysis

Global Themes

USD tumbles to new six-month lows as Dow recovers

The USDSGD fell sharply on Friday after a strong session on Wall Street boosted global optimism. Investors favoured more “risk sensitive” currencies over the USD.

US shares continued to rebound from the heavy selldown seen last week. (The US’s Dow Jones dropped 1.8% on Wednesday on growing political scandal in Washington DC.)

Commodities were also higher. Crude oil was up 2.1% and this helped the Singapore dollar.

The USDSGD dropped 0.6% to finish at the lowest level since 4 November.

Euro gains

In other markets, the euro continued to gain, with the EURSGD climbing to six-month highs.

The EURSGD gained 0.4% on Friday and was up 1.2% over the week.

Other European currencies were higher with the British pound and Swiss franc both stronger. The Swiss franc neared three-month highs.

The commodity currencies remained weaker with the Australian dollar at eight-month lows and the New Zealand dollar near one-year lows.

Upcoming

We have a series of local releases this week, with consumer inflation (CPI) due tomorrow and economic growth figures (GDP) due on Thursday.

From overseas, Wednesday’s Federal Reserve minutes and Thursday night’s US GDP readings will be the key releases.

We also have two key Fed speeches from Lael Brainard and Charles Evans tomorrow morning.


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