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Currency Market Analysis

Oct 04, 2017 | Currency Market Analysis

Global Themes

USD falls from six-week highs as markets look to data

The USDSGD hit six-week highs yesterday but the overnight trading action saw the market ease lower.

Markets have turned more cautious ahead of a series of major economic releases with Friday’s non-farm payrolls the key event.

While markets are currently cautious, better numbers could quickly see the USDSGD higher.

Mixed markets

Other key markets were mixed.

The British pound fell. A sharp drop in construction activity hit the pound and the GBPSGD fell 0.3%.

The Australian dollar remains near two-month lows. Yesterday’s Reserve Bank of Australia statement appeared harmless but, as central banks around the world prepare to raise rates, a lack of a tightening bias from our local bank saw the AUD weaken.

The RBA has previously said that while banks like the US Federal Reserve, Bank of Canada and Bank of England talk about raising rates, there is no imperative for the RBA to move.

The New Zealand dollar was sharply lower after a fall in dairy prices.

Big 24 hours

We’ve got a big 24 hours in FX markets.

Tonight, the US’s ADP employment report will be critical ahead of Friday’s non-farm payrolls.

With the US dollar recently stronger, a solid number tonight could boost expectations – and the US dollar – ahead of Friday’s release.

Also tonight, major speeches from the US Federal Reserve’s Janet Yellen and the European Central Bank’s Mario Draghi will drive markets.

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