Currency Market Analysis

Jul 26, 2017 | Currency Market Analysis

Global Themes

USD finds support ahead of tonight’s Fed

The US dollar’s recent losses have eased this with the greenback higher as markets look ahead to tonight’s crucial meeting of the US Federal Reserve.

The USDGSD saw small gains as it climbed 0.1%.

While the Fed is not expected to move rates, the commentary will be closely watched – a more optimistic view of the US economy could see the USD higher.

The Fed meets at 2.00am tonight.

Aussie in focus

Today’s focus in Asia will be on the Australian dollar as markets brace themselves for the critical inflation reading due at 9.30am.

The Aussie’s recent rally – the AUDUSD is up 7.6% over the last seven weeks – has been partly driven by a more optimistic reading of the Australian economy. However, the Reserve Bank of Australia will need to see a pick-up in local inflation before they act. As a result, today’s inflation number will be critical.

In other markets, the euro was weaker again, as it eased from two-year highs versus the Singapore dollar.

On tenterhooks

Also today, a speech from RBA governor Philip Lowe, due at 1.05pm, can also drive markets, with the topic – “The Labour Market and Monetary Policy” – likely to provide a guide to the RBA’s current thinking.

From the UK, GDP will be closely watched as the pound remains near one-month lows versus the Singapore dollar.

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