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Currency Market Analysis

Aug 14, 2017 | Currency Market Analysis

Global Themes

Greenback slips lower after inflation miss

The USDSGD slipped lower on Friday after the greenback was hit by weaker US inflation.

US CPI was lower than expected with July’s monthly inflation reading up only 0.1% versus the 0.2% expected. Annual inflation was steady at 1.7%.

The chance of a US Federal Reserve rate hike in December fell to 22% (according to Reuters) after the news.

Markets don’t expect a rate hike in September with most looking for the Fed to start reducing the size of its bond holdings when it meets on 21 September.

Safe havens fall

The greenback’s weakness saw the USDSGD fall by 0.2% on Friday.

The Japanese yen also turned sharply lower as sharemarkets around the world recovered some of last week’s geopolitical inspired losses. The JPY fell from two-month highs as safe haven currencies gave back some of last week’s gains.

The EURSGD jumped back towards two-year highs. The euro has recently gained as markets look ahead to a critical meeting of the European Central Bank in early September.

Coming up

Chinese data will be in focus today.

Chinese industrial production and retail sales will both be released at 10am today. A better than expected result could help push the USD lower.

On Thursday, the US Fed releases the minutes of its last policy meeting.

Locally, non-oil exports are due on Thursday.

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