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Currency Market Analysis

Aug 15, 2017 | Currency Market Analysis

Global Themes

Poor Chinese data sends oil, SGD lower

Markets eased back from their North Korean fears overnight with equity markets strongly higher and safe haven currencies weaker.

However, the Singapore dollar was unable to benefit with weaker Chinese data hitting the local currency. The SGD is often driven by moves in oil prices.

Yesterday, Chinese industrial production and retail sales reports missed expectations substantially.

Commodities were weaker with oil down 2.6%. Gold fell 0.6% and iron ore dropped 4.0%.

Weaker

The SGD weakness, combined with a stronger greenback, saw the USDSGD climb 0.2%.

The euro remained near two-year highs. Overnight, Wolfgang Schauble, German finance minister, said the European Central bank is likely to start winding back stimulus in September.

The safe haven currencies were mostly weaker as easing geopolitical fears drove these markets. The Japanese yen fell 0.3% against the Singapore dollar while the Swiss franc fell 0.9%.

UK inflation

Looking to the day ahead, UK inflation will be the major release with a recent jump in UK inflation causing the Bank of England to consider possible rate hikes.

The British pound fell to two-month lows.

From the US, retail sales are due, with markets looking for a guide to second-half US economic growth.


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