Currency Market Analysis

Aug 01, 2017 | Currency Market Analysis

Global Themes

SGD boosted by commodity boom; US price data due

The Singapore dollar – along with most other Asian currencies – remains favoured as improving economic data boosts sentiment to more economically sensitive currencies.

Oil climbed to the highest level in three months while copper jumped to two-year highs.

In particular, iron ore is up over 10% from Friday's close as Chinese construction activity remains strong and the Chinese government looks to reduce production of substandard steel.

Spot iron ore neared US$74 per tonne overnight in a significant jump from this year’s lows below US$54 per tonne.

Mixed markets

The USDSGD fell on the commodity move with the pair falling to its lowest close since September.

The SGD was mixed in other markets. The SGD fell versus the Japanese yen and British pound and was flat against the Swiss franc.

The euro continued to climb with the EURSGD moving above 1.6000 for the first time in two years.

RBA in focus

The focus today will be on the Reserve Bank of Australia meeting due at 12.30pm.

Markets will be looking for commentary about the Australian dollar. With the AUDUSD up 8.6% in two months, its recent rise might see the RBA warn about the impact of a higher AUD.

Tonight, the US personal consumption and expenditure release will be closely watched for signs of rising price pressures. A stronger number could see the USD higher.

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