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Currency Market Analysis

Sep 14, 2017 | Currency Market Analysis

Global Themes

Greenback’s rebound continues as bond yields jump

The overnight action continued to be dominated by the rebound in markets post Hurricane Irma and as North Korean tensions ease.

US sharemarkets made new all-time highs and the US dollar has continued to recover.

USD has continued to stage a recovery with US 10-year bond yields jumping from 2.02% on Friday to 2.20% overnight. This is a significant jump and the main reason for the USD’s gains this week.

Greenback’s comeback

The USDSGD has seen a large rebound this week with the pair up 1.3% from Friday’s lows.

The USDSGD climbed 0.3% overnight.

In other markets, the USD’s gains pressured other currencies, with the British pound down 0.3% and the euro down 0.4%.

The Japanese yen fell to the lowest level in six weeks.

US inflation

From the US, key inflation numbers are due at 8.30pm.

Inflation is all-important in determining the US Federal Reserve’s next move on interest rates with the Fed due to meet next week.

The market is looking for a fall in CPI to 1.5% (from 1.6% last month). This can drive USD volatility tonight.

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