Currency Market Analysis

Jul 28, 2017 | Currency Market Analysis

Global Themes

USD turns higher as volatility returns

The USDSGD climbed from 10-month lows overnight as volatility returned to financial markets.

A heavy selldown in US technology stocks – the US’s Nasdaq index dropped 2.4% in 90 minutes – saw more risk-sensitive currencies like the SGD were weaker.

Despite the move overnight, volatility, as measured by the Chicago Board of Trade’s VIX index, remains near 25-year lows.

Reversal

Other key FX markets also lost ground.

The euro and British pound were both lower as the USD rebounded. The EURSGD fell 0.4% while the GBPSGD fell 0.3%.

The Swiss franc was sharply lower, down 1.4%, on rumours of intervention from the Swiss National Bank.

The Japanese yen, however, was higher, in line with the more cautious market.

USD GDP

US data was better last night, with durable goods orders higher than expected, and this helped the USD higher.

US GDP --- expected at 2.5% in annual terms in a big jump from last quarter’s 1.4% -- will be the big event tonight. The release is due at 8.30pm.

From Europe, a series of CPI and GDP numbers are released tonight with the full data due on Monday.


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