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Currency Market Analysis

Sep 22, 2017 | Currency Market Analysis

Global Themes

USDSGD climbs to two-week highs on Fed

The USDSGD continued higher yesterday after US Federal Reserve said it would soon raise rates.

The Fed’s move to confirm a December rate hike saw shares, commodities and the Singapore dollar all lower.

The market pricing for a US rate hike in December now sits at 72% (source: Reuters).

Aussie hammered

The most significant move was in the euro with the EURSGD jumping from one-month lows.

The EURSGD was up 0.5%.

The AUDSGD was the biggest loser. The Aussie was hit hard in other markets after the RBA governor Philip Lowe said in a speech to the Australia-US Chamber of Commerce that the central bank would not raise rates “for some time”.

Elections in focus

The major upcoming action in FX will be driven by the weekend’s election.

From Germany, federal elections are likely to see Angela Merkel’s centre-right Christian Democrats returned to power. This could support the euro.

In New Zealand, a tight race has made the outcome more uncertain for the ruling centre-right National Party.

A hung parliament could see the NZD higher on Monday while a win for the National Party could see the NZD lower.

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