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Currency Market Analysis

Jun 15, 2017 | Currency Market Analysis

Global Themes

USD plunges to new lows, later gains, as Fed hikes rates

The USDSGD fell to the lowest level since 6 October 2016 in a volatile session driven by US economic news.

Most importantly, the US Federal Reserve said it would raise interest rates by 25 basis points and maintained it would hike once more in 2017.

The Fed’s forecast remained unchanged despite a recent weakening in economic data with inflation recently falling below the Fed’s 2.0% target.

The Fed also maintained forecasts to raise rates three more times in 2018.

SGD gains

Earlier, a drop in US inflation saw the USDSGD fall to eight-month lows.

Annual core inflation fell from 1.9% to 1.7% in May. This continued a recent theme of weakening data.

The SGD was mostly higher in other markets.

The EURSGD fell to one-month lows while the GBPSGD fell back to two-month lows.

BoE, SNB in focus

The next event for the region is Australian employment figures due at 9.30am.

The market is looking for 10k new jobs to be created with the unemployment rate expected to stay steady at 5.7%.

Later, the Bank of England and Swiss National Bank both make decisions on interest rates.

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