Currency Market Analysis

May 23, 2017 | Currency Market Analysis

Global Themes

USD remains at six-month lows as Fed plans in focus

The USDSGD remains near six-month lows overnight as the weakening US dollar continued to drive markets.

Political scandals in Washington DC and worries about a slowing in US economic indicators have seen markets fret that the US Federal Reserve might pull back on plans to raise US interest rates.

While a US hike on 15 June still seems almost certain – market pricing signals a 75% chance – plans for further moves later in the year now seem less firm.

Euro "too weak"

The euro continued higher after German chancellor Angela Merkel said European Central Bank polices were making the currency “too weak”.

The euro climbed 0.4% to trade at the highest level in six months.

In other markets, the British pound and Japanese yen were both flat.

The Australian and New Zealand dollars rebounded from multi-month lows.

Fed speeches

The focus will be on Fed speeches today.

Fed speakers today include Charles Evans at 9.10am and Neel Kashkari speaks at 9.00pm tonight.

Also, purchasing manager index (PMI) numbers will provide an early indication of global economic activity. PMI numbers are due from Japan, Europe and the US.

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