Currency Market Analysis

Aug 07, 2017 | Currency Market Analysis

Global Themes

Greenback stages job-driven comeback

The US dollar was much higher on Friday after a stronger than expected reading from the US non-farm employment report.

The US economy created 209k new jobs – well ahead of the 182k expected – and saw wage growth in line with expectations.

The market saw the result of confirmation that the Fed would soon move to reduce the size of its balance sheet in a move that could push US bond yields higher.

Pound losses continue

The USDSGD climbed 0.2% as it continued to rebound from 10-month highs.

The euro saw substantial losses as it turned lower from two-year highs.

The British pound continued to fall after last week’s Bank of England statement signalled the UK central bank was unlikely to raise rates in the near term.

The Japanese yen also weakened.

Chinese data

We have a big week of local data with Chinese releases in focus this week.

Tuesday will see the Chinese trade balance while Wednesday will bring the inflation numbers.

On Friday, the attention will shift to the US, with inflation due for release.

With US dollar recently stronger, a better inflation number could boost the greenback.

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