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Currency Market Analysis

Aug 11, 2017 | Currency Market Analysis

Global Themes

USD weakens as geopolitical tensions rise

The US dollar weakened further overnight as market tensions grew around the US/North Korea stand-off.

US President Donald Trump said of Wednesday night’s “fire and fury” statement: “maybe that statement wasn't tough enough” and that North Korea risks “being in trouble like few nations have ever been”.

US sharemarkets – as measured by the S&P 500 – fell 1.5%. The volatility index (VIX) climbed to three-month highs while gold hit two-month highs.

Yen, franc rise

The USD was caught up in this negative sentiment and fell versus most key currencies. The USDSGD fell 0.1%.

The EURSGD climbed 0.2% while the GBPSGD fell 0.3%.

The biggest moves were in the safe havens. The JPYSGD climbed fell 0.8% while the CHFSGD climbed 0.2%.

US inflation

Apart from the geopolitical tensions, markets will be looking to tonight’s US inflation numbers.

After last night’s producer prices number slipped below expectations, a weaker CPI number could see the USD fall.

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