Currency Market Analysis

Jun 12, 2017 | Currency Market Analysis

Global Themes

GBP faces fresh headwinds

A disastrous night for PM Theresa May and the conservatives party, lost their parliament majority in Thursday’s election.

Having lost up to 1.6% against the SGD on early polls last week,the GBP fell up to 2.2%,reaching the lowest levels since mid of April.

Short term political stability concerns will likely remain as the key driver for any GBP movements as the PM’s time in the office look to be in danger.

Political risks drove majority of the movements for the US dollar last week.This week however,the US will release key economic data as well as their interest rate decision where futures pricing suggest a more than 90% chance of a rate hike.

CAD higher after massive job gains

The Canadian dollar got a boost from a massive gain of 54,500 jobs in May.This strong number made a case where the central bank could raise rates as early as 2018.

The USDSGD closed higher last week,ending a 4 week slump,after initially testing the lowest levels since Q4 of 2016.

The USDSGD has lost about 5.5% since the start of the year,replicating a move in the first half of 2016,before rebounding strongly in the later half of the year.

This week a flurry of data will be out from the US, with CPI,retail sales and the interest rate decision,being the main focus for the FX market. The US,UK,Japan and Swiss Central bank will be releasing their rate decisions from Thu through Fri. Industrial production figures from China released on Wed will be a driver for Asian currencies.

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