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Currency Market Analysis

Aug 22, 2017 | Currency Market Analysis

Global Themes

Market caution grows as North Korea fears return

Geopolitical fears returned yesterday as joint military exercises between the US and South Korea drew a belligerent response from North Korea.

North Korea said the military drills were “provocative” and could lead to an “uncontrollable nuclear war”.

The worries saw the US dollar lower overnight with the largest losses versus safe havens like the Japanese yen and Swiss franc.

Gold – a key safe haven – jumped 0.6% and ended at its highest closing level in over two months.

Mostly weaker

The US dollar’s losses saw the USDSGD fall 0.2%.

The SGD was weaker versus most other currencies.

The euro climbed 0.3% versus the SGD while the British pound was up 0.1%.

The strongest gains were seen in the safe haven currencies with the Swiss franc up 0.1% and the Japanese yen also up 0.1%.

ECB in focus

Today’s data comes from Europe and the US.

German confidence figures will be closely watched ahead of this week’s series of European Central Bank speeches.

ECB chief Mario Draghi will speak tomorrow afternoon and then later in the week at the US’s Jackson Hole symposium.

From the US, house prices and the Richmond manufacturing index is due overnight.

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